EUR/USD Forecast: Bearish case firmer once below 1.0988
|EUR/USD Current Price: 1.1022
- Robust US data and renewed hopes of a US-China trade deal boosted the dollar.
- European manufacturing output stagnated at multi-year lows.
- EUR/USD technically bearish trading just above the 1.1000 figure.
A dull week finished with a bang for the greenback, which appreciated sharply against most major rivals on solid local data and renewed hopes about the US-China trade deal. Disappointing macroeconomic data elsewhere added to the dollar’s rally, as European figures out on Friday came in below the market’s expectations. The preliminary November estimates of Markit PMI for the EU showed that manufacturing output bounced modestly, with the index up to 46.6 from 45.9 previously, although services activity decelerated to 51.5 from 52.2. In the US, on the other hand, the numbers were upbeat, as the Manufacturing PMI printed at 52.2 while the Services PMI came in at 51.6, surpassing both the October final readings and the market’s expectations. Also, the final version of the US November Michigan Consumer Sentiment index came in at 95.6, better than the preliminary estimate of 95.7. Finally, US President Donald Trump said a trade deal with China was "potentially very close."
This Monday, Germany will release the November IFO survey on Business Climate, seen bouncing from 94.6 to 95. The US is set to publish minor data, including the October Chicago Fed National Activity Index and the Dallas Fed Manufacturing Business Index.
EUR/USD short-term technical outlook
The EUR/USD pair settled around 1.1020 after hitting a weekly high of 1.1096 on Thursday, not far from November’s low at 1.0988. This last, it’s also the 61.8% retracement of the October rally, a relevant and immediate support. In the daily chart, the picture is bearish, as the pair was rejected by sellers aligned around its 100 DMA, while technical indicators stand within negative levels with uneven downward strength. In the 4-hour chart, the downward potential is even stronger, with technical indicators offering bearish slopes near oversold levels, and the pair developing far below all of its moving averages.
Support levels: 1.0985 1.0950 1.0915
Resistance levels: 1.1065 1.1110 1.1145
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.