EURUSD: on-going reversal
The evident resilience of the US economy pushed the value of USD to higher grounds. In the spotlight of the market were jobs figures, where non-farm payrolls in November reached a level of 199K of new jobs, a bit above market estimate of 180K. At the same time, the unemployment rate in November was a huge surprise for analysts, as it dropped to the level of 3.7% from expected 3.9%. Average hourly earnings were increased by 0.4% for the month and 4% on a yearly basis. This was in line with market expectations, which means that the inflation should not be pushed to the much higher grounds implying that the Fed will not increase rates at December`s FOMC meeting. As for other data published for the US economy, the ISM Services PMI for November was at 52.7 a bit better from market estimate of 52. Michigan Consumer Sentiment preliminary for December reached the level of 69.4, highly above 62 expected by the market.
Data for the Euro Area GDP Growth in Q3 after the third estimate show a bit reversal toward the -0.1% q/q from +0.1% posted previously. The growth rate on a yearly basis was modestly corrected toward 0.% from 0.6% during the second estimate. Inflation rate in Germany in the November final was standing at 3.2% exactly in line with market expectations.
The eurusd continued with its reversal started two weeks ago. The currency pair started the week around 1.09 level and moved through the week to the level of 1.073, which was the lowest weekly level. Still, the pair is ending the week at level of 1.0758. The RSI crossed the 50 line, finishing the week at level of 45. This is a clear indication that the market is now eyeing the oversold side. Moving average of 50 days continues its modest convergence toward the MA200 counterpart, but considering higher distance between two lines, the cross is not in store for some time in the future.
The week ahead is the week of the FOMC meeting and the US inflation data. In this sense, it could be expected for current market volatility to continue in the coming week. The currency pair tested the 1.08 level. Selling orders continue to be strong, which increases probability for the next support line at 1.067 to be tested in the week ahead. A move to the upside, could bring back the currency pair toward the 1.09, with currently decreased probability that the pair might return toward the 1.10 resistance.
Important news to watch during the week ahead is:
Euro: ZEW Economic Sentiment Index for December for the Euro Area and Germany, ECB interest rate decision, HCOB Manufacturing PMI Flash for December
USD: Inflation Rate for November, Producer Price Index for November, FOMC meeting -rate decision and economic projections, after the meeting Fed Chair Powell Conference, Retail Sales for November
Data for the Euro Area GDP Growth in Q3 after the third estimate show a bit reversal toward the -0.1% q/q from +0.1% posted previously. The growth rate on a yearly basis was modestly corrected toward 0.% from 0.6% during the second estimate. Inflation rate in Germany in the November final was standing at 3.2% exactly in line with market expectations.
The eurusd continued with its reversal started two weeks ago. The currency pair started the week around 1.09 level and moved through the week to the level of 1.073, which was the lowest weekly level. Still, the pair is ending the week at level of 1.0758. The RSI crossed the 50 line, finishing the week at level of 45. This is a clear indication that the market is now eyeing the oversold side. Moving average of 50 days continues its modest convergence toward the MA200 counterpart, but considering higher distance between two lines, the cross is not in store for some time in the future.
The week ahead is the week of the FOMC meeting and the US inflation data. In this sense, it could be expected for current market volatility to continue in the coming week. The currency pair tested the 1.08 level. Selling orders continue to be strong, which increases probability for the next support line at 1.067 to be tested in the week ahead. A move to the upside, could bring back the currency pair toward the 1.09, with currently decreased probability that the pair might return toward the 1.10 resistance.
Important news to watch during the week ahead is:
Euro: ZEW Economic Sentiment Index for December for the Euro Area and Germany, ECB interest rate decision, HCOB Manufacturing PMI Flash for December
USD: Inflation Rate for November, Producer Price Index for November, FOMC meeting -rate decision and economic projections, after the meeting Fed Chair Powell Conference, Retail Sales for November
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