- EUR/USD is on track to end November on a negative note.
- November's drop has poured cold water over the optimism generated by October's sharp rally.
- The EUR may find love if the German data betters estimates.
- Gains could be short-lived due to the Sino-US political tensions.
EUR/USD is currently trading just above 1.10, representing a 1.27% drop on the monthly opening rate of 1.1151.
The pair is on track to end November on a negative note, having jumped 2.33% in October. That was the biggest monthly gain since January 2018.
October's sharp rise had neutralized the immediate bearish setup. A strong follow-through in November, preferably in the form of a convincing break above October's high of 1.1179, would have confirmed a bullish reversal.
The pair, however, has come under pressure, as noted earlier, pouring cold water over the optimism generated by October's 2.3% gain.
Focus on German and Eurozone data
Consumer spending, as represented by retail sales, is forecasted to have increased at an annualized rate of 1.1% in October, having risen by 3.4% in the preceding month. The retail sales data is due at 07:00 GMT.
Meanwhile, the data due at 08:55 GMT is expected to show the economy added 5K jobs in November and the jobless rate remained steady at 5%.
Post-German data, the focus would shift to the Eurozone consumer price index and the jobless rate, scheduled for release at 10:00 GMT.
The single currency will likely take a beating if the German jobs data disappoints expectations. Germany is already facing downward pressure from the external sector. If the labor market cools sharply, the consumers will likely tighten their purse strings, leading to a deeper economic slowdown.
On the flip side, the pair will likely find bids if key data beat estimates. That said, the gains could be short-lived, courtesy of the Sino-US political tensions. President Trump signed the Hong Kong Democracy Bill earlier this week, irking China. That could complicate matters on the trade front.
Technical levels
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