The EUR/USD chart looks like a grand piano, where white keys are replaced by black ones. During the first week of 2023 the initiative changed hands: bearish ones, and vice versa replaced bullish daily candlesticks. Formally the round ended in favor of the sellers: last Monday trading started at 1.0704, and on Friday it closed at 1.0645. 

The past week was marked with an important moment: the dollar asserted itself again. Not as well as the dollar bulls would like it to, but it was very revealing. Take a look at the weekly chart of the eur/usd: almost every candlestick in W1 is bullish since the end of October. The pair systematically moved upward with heavy pullbacks, but overcame the path from the parity point to the seventh figure. 

EUR/USD exchange rate — what shapes the trend of the exchange rate? 

The first week of 2023 reflected the inability of buyers to break above 1.0700. The sellers made an attempt to break above the 4-th figure. And though this attempt ended in failure, the alarm bells for the bulls eur/usd sounded. Traders did not decide on the price movement vector and it is too early to write off the greenback. Several fundamental factors played in favor of the strengthening of the American currency.

The minutes of the December meeting of the Federal Reserve System were published last Wednesday, which rhetoric was hawkish. The essence of the document is that the regulator does not intend to turn around a hawkish course this year: rates will remain at a high level and will not be lowered until 2024. 

It will be important for the Fed to keep rates high after it stops raising them. True, it did not answer another question — whether the central bank intended to revise the final rate forecast downward. The minutes did not answer that question either, so the release had limited impact on the pair.

What does the fate of the EUR/USD chart depend on? 

The fate of the EUR/USD pair largely depends on the rhetoric of representatives of the Fed and the European Central Bank (for example, Jerome Powell is expected to speak on Tuesday, January 10). Also next week will be the release of the U.S. inflation growth data. This release will complete the puzzle and either strengthen or weaken the U.S. currency.

The first week of January showed that it is too early to write off the dollar. The greenback is ready to show its character by reacting to the current information flow. At the same time, eur/usd traders are not ready to bet on the U.S. currency, yet — the successes of the dollar bulls are situational and temporary. Market participants need a strong information trigger — inflation report (Thursday, January 12) and/or speech of the head of FRS (Tuesday, January 10).

Earlier we reported that the USD is getting cheaper against most of the major currencies.