The euro spent another day in the bears’ territory amid mixed reports from the US. EURUSD steadily traded lower after opening at 1.1018 all the way down to its intraday low at 1.0992. By the end of Wednesday’s trading the currency pair was down 21 pips.
One of the biggest forex news yesterday was the preliminary GDP reading for the third quarter of 2019. The report printed a 2.1% uptick which was higher than the forecast and the last GDP report. Both readings were at 1.9%. This is the first of three versions of the US’ growth data, and thus, it tends to get the most attention as it gives investors the first glimpse of the country’s economic health.
Durable goods orders also beat expectations. The headline and core figures both came in at 0.6% versus the -0.5% and 0.2% forecasts. Unemployment claims were also lower than the 223k consensus when it printed at 213k.
On the other hand, the Chicago PMI showed that business activity in the area is slower than expected at 46.3 versus the 47.2 consensus. The core PCE index also showed softer inflationary pressures than anticipated at 0.1% which missed the 0.2% uptick.
Today is Thanksgiving Day in the US which means that there won’t be any US data due for release. We do have Germany’s preliminary CPI reading for November. It is expected that consumer prices in euro zone’s largest economy declined by 0.7% this month.
It’s worth noting, however, that the report is ranked as a second-tier report which means that the market’s reaction to it is often subtle. With that said, keep tabs on our site as we provide updates on the ongoing US-China trade negotiations.
Earlier today, US President Donald Trump signed the HK bill into law. It is widely seen to side with protesters as one of its stipulations include banning sales of munitions to HK police. This could be detrimental to negotiations and skepticism over a deal getting passed soon could weigh on market sentiment.
On the hourly chart, we can see that EURUSD has pulled back to its November 25 lows. The area where it is currently trading, 1.1000, also coincides with the 50% Fib level (drawing the Fibonacci retracement level from November 26 to yesterday’s low).
An upside move on the currency pair looks to be limited within these Fib levels as they also align with the falling trend line (connecting the highs of November 25 and November 26). If there are enough buyers to break resistance at 1.1011, EURUSD could be on its way to test resistance at last week’s highs around 1.1095.
On the other hand, a close below yesterday’s low could trigger a drop to this year’s lows around 1.0876.Download our latest quarterly market outlook for our longer-term trade ideas.