EUR/USD analysis: hard to find reasons to buy the common currency
|EUR/USD Current price: 1.1387
- US final Markit Services and Composite PMI seen matching preliminary estimates.
- Political headlines to keep overshadowing macroeconomic releases.
The EUR/USD pair hit a weekly high of 1.1455 on Friday but ended up giving up daily gains and closed at around 1.1385. Dollar's bearish stance amid risk appetite overshadowed the US Nonfarm Payroll report, which, despite posting solid figures, failed to give the dollar a relevant boost. According to the official release, the US economy added 250K new jobs in October, largely surpassing the 190K expected, although the September headline was downwardly revised to 118K from the previous estimate of 134K. The unemployment rate remained steady at 3.7%, while average hourly earnings were up 3.1% YoY, above 3.0% for the first time in over nine years. Solid wages' growth was already expected, offsetting the effect of the strong number. The EUR/USD pair eased from such high on the back of profit-taking ahead of the weekend, with the decline exacerbated by reports indicating that the ECB will consider fresh TLTRO buying in its December meeting, as a result of banks needing fresh funds.
Markit Manufacturing PMI for the EU and the US were a miss, and this Monday, the US will see the publication of the final Services index for October, expected at 54.7 as previously estimated, while the Composite index is expected also unchanged at 54.8. The EU won't offer anything relevant.
The daily chart for the EUR/USD pair shows that the pair is developing below all of its moving averages, with strong selling interest aligned around the shorter one, rejecting the advance. Technical indicators have resumed their declines well into negative territory after correcting oversold conditions, keeping the risk skewed to the downside. The chart also shows that the pair failed to sustain gains above the 23.6% retracement of the September/October decline at 1.1420, another sign that the upward potential is limited despite greenback's sell-off these last few days. In the 4 hours chart, the pair retreated from a bearish 100 SMA but settled above a now flat 20 SMA, while technical indicators held within positive ground, aiming higher but far from their daily highs. Renewed buying interest beyond the 1.1420 price zone could see the pair extending its advance beyond the mentioned high, while below 1.1360, the pair will likely spend the upcoming sessions in the red.
Support levels: 1.1360 1.1330 1.1300
Resistance levels: 1.1420 1.1455 1.1490
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