EUR/USD Forecast: Euro holds ground after German sentiment data
|- EUR/USD moves up and down in a narrow channel above 1.0900 on Friday.
- Business sentiment in Germany improved slightly in November.
- The US Dollar struggles to find demand ahead of the weekend.
EUR/USD closed the second consecutive in negative territory on Thursday but managed to stabilize above 1.0900 early Friday. S&P Global will release the Manufacturing and Services PMI data for the US later in the day but thin trading conditions on Black Friday could limit the pair's action ahead of the weekend.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.08% | -0.87% | -0.26% | -0.84% | -0.27% | -1.08% | -0.27% | |
| EUR | 0.07% | -0.82% | -0.19% | -0.78% | -0.19% | -1.01% | -0.18% | |
| GBP | 0.89% | 0.77% | 0.63% | 0.06% | 0.63% | -0.17% | 0.63% | |
| CAD | 0.27% | 0.21% | -0.61% | -0.57% | 0.01% | -0.80% | 0.01% | |
| AUD | 0.85% | 0.78% | -0.01% | 0.60% | 0.59% | -0.21% | 0.59% | |
| JPY | 0.28% | 0.20% | -0.83% | 0.02% | -0.56% | -0.79% | 0.02% | |
| NZD | 1.09% | 0.99% | 0.22% | 0.83% | 0.25% | 0.82% | 0.82% | |
| CHF | 0.26% | 0.18% | -0.62% | 0.00% | -0.56% | -0.02% | -0.83% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
The data from Germany showed that the headline German IFO Business Climate Index improved to 87.3 in November from 86.9 in October. The Current Assessment Index edged higher to 89.4 from 89.2, while the Expectations Index rose to 85.2 from 84.8. Although these figures came in slightly below analysts' estimates, they had virtually no impact on the Euro's valuation.
Meanwhile, in an interview with the Boersen-Zeitung paper on Thursday, European Central Bank policymaker Pierre Wunsch called the market pricing of rate cuts "very optimistic" and argued that this stance could increase the likelihood that more tightening will be needed.
The private sector's business activity in the US is forecast to expand at a soft pace in November. In case PMI readings disappoint, the US Dollar (USD) could have a difficult time staying resilient against its peers in the American session.
EUR/USD Technical Analysis
EUR/USD continues to trade within the upper-half of the ascending regression channel and the Relative Strength Index stays slightly above 50, reflecting the lack of seller interest.
1.0950 (Fibonacci 61.8% retracement of the July-October downtrend) aligns as strong resistance before 1.1000 (psychological level, static level) and 1.1025 (static level from August).
On the downside, supports are located at 1.0900 (50-period Simple Moving Average (SMA), psychological level), 1.0850 (Fibonacci 50% retracement) and 1.0800 (100-period SMA, lower limit of the ascending channel).
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