EUR/USD Current price: 1.0537
- President-elected Donald Trump threatened to impose additional tariffs on China.
- United States Consumer Confidence expected to have improved in November.
- EUR/USD is bullish in the near term and may test the 1.0600 mark.
The EUR/USD pair extends its corrective advance on Tuesday, trading above the 1.0500 mark. The pair eased during Asian trading hours as President-elected Donald Trump threatened to impose an additional 10% tariff on China and an extra 25% tariff on Mexico and Canada, denting the market’s mood. The US Dollar surged as stocks plunged.
European stocks also came under selling pressure, following the lead of their Asian counterparts. Nevertheless, the EUR/USD pair changed course and bounced from an early low at 1.0424.
Data-wise, the Eurozone did not publish relevant figures. On the contrary, the American session will bring Nonmember CB Consumer Confidence, foreseen at 111.8, up from the previous 108.7. Later in the day, the Federal Open Market Committee (FOMC) will release the Minutes of its November meeting.
The FOMC then trimmed its benchmark interest rate by 25 basis points (bps) to a target range of 4.50%-4.75%. Policymakers voted unanimously to cut interest rates.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows it keeps correcting higher. Technical indicators head firmly north but remain within negative levels, far from suggesting the rally will continue. Indeed, the pair may extend its near-term gains, but the long-term perspective is still bearish. The same chart shows the pair keeps developing below all its moving averages. Additionally, the 20 Simple Moving Average (SMA) maintains its downward slope, far below the 100 and 200 SMAs.
In the near term, however, the pair is poised to extend its advance. The EUR/USD pair advances beyond a now flat 20 SMA, the latter providing dynamic support around 1.0475. At the same time, technical indicators keep grinding higher after crossing their midlines, maintaining firm upward slopes. Finally, the 100 SMA maintains its downward strength above the current level, providing resistance at around 1.0630.
Support levels: 1.0510 1.0475 1.0425
Resistance levels: 1.0560 1.0600 1.0630
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