Before the announcement of inflation numbers for the Eurozone, which will have an impact on the future of the European Central Bank’s policy. Moreover, the rest of the US economic data package, led by the US Federal Reserve’s preferred US inflation reading and the number of weekly unemployed claims. Recently, the exchange rate of the euro currency pair against the dollar (EUR/USD) stabilizes. Also, it achieved its highest gains in three months, as it tested the resistance level of 1.1016 before settling around the 1.0980 level at the time of writing the analysis, waiting for anything new.
Euro forecasts in the coming days:
The performance of the euro price will improve in the coming days based on investor sentiment regarding the future recovery of the euro zone economy, in addition to the future of global central banks’ policy. So far, the European Central Bank is on the path to tightening the same path as the US Federal Reserve’s policy, which explains the stability of the currency pair in the recent period. Thus, the results of European economic data today and tomorrow will paint a clearer picture of the performance of the European economy and, consequently, the price of the euro.
According to fundamental analysis, the EUR/USD currency pair is trading influenced by the results of recent economic data, as the preliminary German consumer price index for November came in contrary to expectations (monthly) of -0.2%, with a change of -0.4% recorded. Finally, the equivalent (on an annual basis) also decreased from 3.5%, with a change of 3.2%.
At the same time, the preliminary consolidated consumer price index failed to match expectations (monthly) of -0.3% with a change of -0.7%, while the index (on an annual basis) fell below 2.7% with a change of 2.3%. On the other hand, the European Union Economic Sentiment Index for November exceeded the estimate of 93.7 with a reading of 93.8.
In the United States of America, the preliminary annual US GDP for the third quarter grew by 5.2%, exceeding expectations by 5%, and up from the previous quarter’s growth rate of 4.9%. The preliminary US GDP price index for this quarter matched the expected growth rate of 3.5%, which is equal to the change recorded in the previous period. On the other hand, preliminary PCE prices for the third quarter came in less than the expected change (on a quarterly basis) of 2.9%, with a change of 2.8%.
EUR/USD Analysis Today:
Yesterday's decline pushed the EUR/USD closer to the 100-hour moving average line. However, it seems that the currency pair still has a lot of room to run before it reaches the oversold levels of the RSI 14-hour. In the near term, and according to the performance on the hourly chart, it appears that the EUR/USD is trading within a descending channel formation. This indicates a significant short-term downward bias in market sentiment. Therefore, the bears will target extended declines at around 1.0951 or lower at the 1.0932 support. On the other hand, the bulls will look to pounce on bounces at around 1.0990 or higher at 1.1009 resistance.
In the long term, and according to the performance on the daily chart, it appears that the EUR/USD currency pair is trading within an upward channel. The pair has now risen to trade near the overbought levels of the Relative Strength Index on the 14-hour frame. furthermore, the bears will target potential pullback profits at around 1.0881 or lower at the 1.0789 support. On the other hand, the bulls - the bulls - will be looking to pounce on profits at around 1.1054 or higher at the 1.1140 resistance.
