- Summary:
- Without any major updates on the US-China trade negotiations and economic data, EURUSD closed higher in yesterday's trading on profit-taking.
Euro bulls had something to be thankful for as Europe’s shared currency finished slightly higher against the US dollar on Thanksgiving Day. EURUSD opened at 1.0997 and inched higher to tap an intraday high of 1.1017. It finished the day at 1.1005.
EURUSD is under selling pressure the last two weeks amid confusing headlines from the trade talks between US and China. Investors concerns rise after President Donald Trump signed the legislation that supports the Hong Kong protesters; now wait to see the reaction from China and if they proceed with any counter measures. As we don’t expect any significant policy moves from ECB and Fed by the end of the year, the developments in trade talks will be the main market driver of EURUSD.
A little bit of profit-taking might have allowed EURUSD to post modest gains yesterday. After all, the currency pair is down almost 200 pips from its November highs.
Today, a few third tier reports from the euro zone are scheduled for release which could potentially move EURUSD on the charts.
We kick things off at 7:00 am GMT with the German retail sales eyed at -0.2%.
Then at 7:45 am GMT, French preliminary GDP is seen at 0.3%, French consumer spending is forecasted at 0.2%, while French CPI is estimated at 0.0%.
At 8:55 am GMT, the German unemployment change report is anticipated to print at 5,000.
At 10:00 am GMT, the euro zone CPI flash estimate is seen at 0.8%. Meanwhile, the core CPI reading is eyed at 1.2%.
Latest economic data from Germany shows an improved of the manufacturing sector while the economy avoided the technical recession. Eurozone data also shows an improvement, and that might be supportive for the common currency.
EURUSD Outlook
The hourly chart of EURUSD shows that the currency pair is testing resistance at the falling trend line (from connecting the highs of November 25, November 26, and November 27). A break above yesterday’s high at 1.1017 could mean that EURUSD is on its way to its November 25 highs at 1.1030. On the other hand, if resistance holds, the currency pair could fall to its November 27 lows at 1.0991.
The technical outlook for EURUSD now is neutral and only a break above the levels that I mentioned will start a new trend.