EUR/USD unable to maintain the 1.18 handle or buy this dip?
|EUR/USD rallied to above the 1.18 handle and some making fresh highest levels since the 13th October's business. However, EUR/USD is now trading at 1.1797, still up 0.03% on the day, having posted a daily high at 1.1861 and low at 1.1785.
EUR/USD has now pared back all the ground lost in late Oct following the ECB’s tapering decision. The Eurozone (German) growth data was a boost at a time where markets are losing faith in the US economy's progress and the sustainability of the Trump trade if the GOP can't push through favourable tax reform, for one aspect of the reflation trade that Wall Street rallied circa 20% on the back of such prospects. Also, the Eurozone recently reported another large, EUR 25bn trade surplus for Sep, above expectations for an EUR21bn surplus.
Cut corporate taxes to boost investment and wages? - BBH
In respect to tax reform, the House Republicans plan to vote on their tax reform bill on Thursday while the House and Senate aim to pass separate bills before reconciling them, according to House Speaker Paul Ryan says.
Meanwhile, from US data today:
- US CPI: Soft headline, but core inflation is strengthening - Wells Fargo
- United States Retail Sales (MoM) above expectations (0%) in October: Actual (0.2%)
- Atlanta GDPNow for 4Q comes in at 3.2% vs. 3.3% last
EUR/USD levels
"Above the 1.1858/1.1910 area (early August and October highs) lies the 1.2092 September high," according to analysts at Commerzbank. The FXStreet Technical Confluences Indicator highlights 1.1900 as R2 and a daily pivot point, a strong looking resistance level. "We will maintain our downside target of the 200 day ma at 1.1304 for now but acknowledge that this is looking less likely. Near-term dips are indicated to terminate circa 1.1765/40," the analysts at Commerzbank acknowledged. "We spot resistance at 1.1880/85 (mid-Oct highs and 61.8% Fib retracement of the 1.21/1.1550 drop). Modest EUR dips look a buy," argued analysts at Scotiabank.
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