Forex Focus
EURUSD pared some of its losses yesterday as economic reports from the US failed to meet market expectations. The currency pair opened at 1.1075 and constantly found support at the open price throughout the day. By the end of the New York session, it was up at 1.1087.
The Census Bureau reported a decline in new purchase orders placed with manufacturers in November. The headline reading printed at -2.0% versus the consensus which was for a 0.2% uptick. On the other hand, the core reading which excludes transportation came in flat. It failed to meet the 1.5% uptick that traders were looking for. Meanwhile, new home sales also disappointed forecasts at 710,00 versus the 730,000 forecast.
It may have also helped the euro that, across the Atlantic, German import prices grew by 0.5%. Expectations were only for a 0.1% uptick for November.
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Remember the setup on the 4-hour time frame of EURUSD? Well, looking at the hourly time frame, we can see that the currency pair is currently testing resistance at the falling trend line when you connect its recent highs from H4. The area around 1.1090 also coincides nicely with the 50% Fib level when you draw from the high of December 20 to its intraday low.
If there are enough sellers in today’s trading, we could see EURUSD trade lower to this week’s low at 1.1065. On the other hand, a strong bullish close above 1.1090 could mean that the currency pair may soon trade to resistance at 200 SMA around 1.1120.