Thursday 24 November 2016


EUR/USD


The American dollar firmed up early US session, rallying up to fresh yearly highs against the EUR, even before the release of better-than-expected US data, and in spite of European one, showing that economic activity expanded in the region. According to Markit preliminary November readings, the EU composite PMI is estimated to have been of 53.7 from previous 53.3, the strongest pace of growth so far this year. The German manufacturing sector expanded by less than expected, but posted a solid 54.4, while the Services PMI came in at 55.0, a six-month high.


In the US Durable Goods Orders surprised to the upside, up for fourth month in the last five, jumping 4.8% in October. The preliminary Markit Manufacturing PMI came in at 53.9, beating expectations of 53.4, while the Michigan Consumer Sentiment index printed 93.8, its highest in six months. On the downside, weekly unemployment claims rose to 251K in the week ending November 18, while New Home Sales fell in October, down by 1.9%. Finally, the FOMC released the Minutes of its latest meeting, showing that most FED officials saw a rate hike appropriate 'relatively soon.' The market barely react to the news, as it did not add nothing new to what the market already knew.


From a technical point of view, the pair is poised to extend is slide, given that it remains below the 1.0600 level, and below its moving averages in the 4 hours chart, with the 20 SMA offering an immediate resistance around the level. Technical indicators in the mentioned chart has posted a modest bounce within bearish territory, but clearly reflecting the lack of buying interest around the pair. A rate hike for December has been fully priced in, yet the greenback has not yet seen its top. December 2015 low is the immediate support, at 1.0505, with followed by March 2015 low of 1.0461.


Support levels: 1.0505 1.0460 1.0420


Resistance levels: 1.0590 1.0640 1.0675


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