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EUR/USD struggles around 1.0600, US PCE Inflation, Durable Goods Orders eyed

  • EUR/USD begins Friday on mixed sentiment after posting two-day downtrend.
  • Firmer US data, geopolitical fears exert downside pressure amid sluggish session.
  • News from China, US Senate lure buyers amid more hawkish ECB outlook than the Fed.
  • US Core PCE Price Index, Durable Goods Orders for November will be crucial for clear directions.

EUR/USD bears run out of steam after a two-day losing streak as they brace for the key data on Friday. Even so, the buyers have a long way to go as the year-end holiday mood restricts the market moves. That said, the major currency pair refreshed weekly top the previous day before reversing from 1.0660, picking up bids to 1.0600 by the press time.

EUR/USD initially cheered risk-on mood and softer US Dollar, as well as the downbeat Treasury bond yields to favor buyers during early Thursday. The same could be linked to the sentiment-positive headlines from China and mixed US data, as well as the Bank of Japan’s (BOJ) another unscheduled bond operation. Also likely to have favored the pair buyers could be the hawkish comments from the European Central Bank (ECB) officials as Vice-President Luis de Guindos said on Thursday that “we should expect to raise interest rates at this pace for a period of time.”

Following that, firmer prints of the US growth and consumption data allowed the US Dollar to reverse the early losses and end the day on a positive side. That said, the US economy expanded at an annualized rate of 3.2% in the third quarter (Q3), per the final readings of the Gross Domestic Product (GDP), versus 2.9% previous estimates. Further, the Personal Consumption Expenditure (PCE) Prices match 4.3% QoQ estimations during Q3 2022 whereas the Core PCE improved to 4.7% QoQ versus 4.6% market forecasts.

It’s worth noting that the news surrounding China’s no quarantine limits for foreigners, starting from January, joins the US Senate’s passage of a $1.7 trillion government funding bill and offers positive support to the risk appetite. Alternatively, Ukrainian President Volodymyr Zelensky’s US visit and Russian President Vladimir Putin’s readiness to increase the country’s military potential weigh on the sentiment.

Amid these plays, Wall Street closed in the red while the US Treasury yields regain upside momentum after Wednesday’s pause to the run-up.

Looking forward, US Core Personal Consumption Expenditure (PCE) - Price Index, the Federal Reserve’s preferred inflation gauge, will join the monthly Durable Goods Orders to offer the one last shot of market activity before witnessing the holiday-linked inaction. Forecasts suggest that the US Core PCE Price Index remains unchanged at 0.2% MoM. However, the Annualized forecasts suggest softer figures of 4.7% YoY versus 5.0% previous readings. Additionally, US Durable Goods Orders could register a contraction of 0.6% in November compared to the previous increase of 1.1% (revised from 1.0%).

Technical analysis

A clear downside break of 1.0580 horizontal support, the previous resistance, appears necessary for the EUR/USD bears to retake control.

Additional important levels

Overview
Today last price1.0596
Today Daily Change-0.0015
Today Daily Change %-0.14%
Today daily open1.0611
 
Trends
Daily SMA201.0519
Daily SMA501.023
Daily SMA1001.0099
Daily SMA2001.0339
 
Levels
Previous Daily High1.0646
Previous Daily Low1.059
Previous Weekly High1.0736
Previous Weekly Low1.0506
Previous Monthly High1.0497
Previous Monthly Low0.973
Daily Fibonacci 38.2%1.0611
Daily Fibonacci 61.8%1.0625
Daily Pivot Point S11.0586
Daily Pivot Point S21.056
Daily Pivot Point S31.053
Daily Pivot Point R11.0641
Daily Pivot Point R21.0671
Daily Pivot Point R31.0696

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
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