Euro rolling into the Asian session below the 1.1024 level
The Euro, on the daily chart, is trading in a downtrend below the main daily simple moving averages (DMAs). This Thursday, the market traded mainly sideways with a spike at the end of the London session.
EUR/USD latest news
EUR/USD latest analysis
1. Technical Overview
The EUR/USD pair is trading at around 1.1020, and despite being in the green for the day, it has posted a lower low a third consecutive day. Nevertheless, the pair is also holding above the 61.8% retracement of the October rally at around 1.0990, the immediate support. In the 4-hour chart, the pair has pared its advance around a bearish 20 SMA, which maintains its downward slope below the larger ones, while technical indicators have recovered within negative levels, lacking enough momentum to confirm additional gains ahead. The 50% retracement of the mentioned rally comes at 1.1030, providing immediate resistance.
Support levels: 1.0990 1.0950 1.0920
Resistance levels: 1.1030 1.1065 1.1110
EUR/USD PRICE SENTIMENT
EUR/USD BULLISH PERCENTAGE INDEX
EUR/USD Pivot points
EUR/USD trading positions
2. Fundamental Overview
The market’s mood took a turn to the worst mid-US afternoon, with US Treasury yields plummeting to fresh weekly lows and US indexes falling. The dollar eased against most major rivals, although there was no clear catalyst behind the slide. Market players, however, are concerned about progress in US-China trade talks, and Trump impeachment’s process.
Data failed to impress, as, despite better-than-anticipated, growth figures in the Union were far from signalling the slowdown is over. German Q3 Gross Domestic Product resulted at 0.1%, better than the flat growth predicted by analysts. The EU preliminary Q3 GDP met the market’s expectations by printing 0.2%, and in both cases, the yearly readings were slightly better than forecasted. The US just released the October Producer Price Index, which came in better than anticipated, up by 0.4% MoM and by 1.1% YoY. Initial Jobless Claims for the week ended November 8 increased to 225K far above the expected 215K.
The EU will release October final CPI figures this Friday, seen at 0.7% YoY, while the US will publish October Retail Sales, foreseen bouncing from the previous -0.3%. The country will later release Industrial Production and Capacity Utilization for the same month.
EURUSD FUNDAMENTALS TODAY
After the meetings in October it was unclear if the new levies planned for December would be called off. And now, reports suggest that past duties may be removed. All in all, a positive development, isn't it?
3. Big Picture
Themes affecting the EUR/USD
SPECIAL YEARLY FORECAST
Two things dominated the financial world this 2018: political turmoil and fears of slowing economic growth. The first was quite foreseeable with Brexit and Trump´s victory in the US but the second dawned on markets like a cold shower in the second half of the year. It was not far ago when EU's growth hit record highs, according to Markit, with business activity shrinking to its lowest pace of growth in over four years in December.
Influential Institutions & People for the EUR/USD
The Euro US Dollar can be seriously affected by news or the decisions taken by two main central banks:
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone and maintain price stability, so that the euro’s purchasing power is not eroded by inflation. The ECB aims to ensure that the year-on-year increase in consumer prices is less than, but close to 2% over the medium term. Another of its tasks is the one of controlling the money supply. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde is the President of this organism since November 1st 2019.
On the other
Christine Lagarde was born in 1956 in Paris, France. Graduated from Paris West University Nanterre La Défense and became President of the European Central Bank in November 1st 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007–2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005–2007). Her comments as ECB President may determine positive or negative trends for the Euro in the short-term. Usually, a hawkish outlook is seen as positive/bullish for the EUR, while a dovish one is seen as negative/bearish.
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
ECB NEWS & ANALYSIS
FED NEWS & ANALYSIS
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, it is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online. If there is important U.S. data we can expect quiet markets just ahead of the number. U.S. economic news have the ability to either reinforce an existing trend or reverse it depending on by how much it missed or beat expectations with the EUR/USD news. By 5:00 GMT liquidity leaves the market once again as European traders close out positions and head home.
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', reffering to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from United States of America). The Cable is a widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, where the majority of the British voted to abandon the European Union, GBP/USD has been suffering some turbulence in the Forex market as a consequence of the associated risks of leaving the single market.
The USD/JPY (or US Dollar Japanese Yen) currency pair is one of the 'Majors', the most important pairs in the world. Japanese Yen has a low interest rate, normally used in carry trades, that's why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when reffered to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is dued to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.