EUR/USD Technical Analysis: Strong Move Ahead - 21 November 2019

EUR/USD is carefully quiet for two sessions in a row, the pair is moving between the 1.1053 support and the 1.1083 resistance above. Yesterday, data from the German statistics agency, Destatis, showed that producer prices in Germany fell for the second consecutive month in October due to energy prices. Producer prices fell -0.6 percent year-on-year in October, larger than the -0.1 percent drop in September. This was the second consecutive decline. Economists had expected an annual decline of -0.4 percent. On a monthly basis, producer prices fell by -0.2 percent, as opposed to a 0.1 percent increase in September. Prices were expected to fall 0.0 percent. Excluding energy, producer prices rose 0.3% on a monthly basis but fell 0.2% from the same period last year. Energy prices fell 3.1 percent year on year.

With the lack of confidence in the European economy and the ECB plans, which negatively affect the Euro in the exchange market; Isabel Schnabel, Germany's candidate on the ECB's executive board, has urged his German economic colleagues to ease their criticism of the central bank's policies. “Dear German economic colleagues, if you are wondering what you can do for Europe: please help dispel the harmful and false tales about the ECB's monetary policy, which are floating in the political and media circles,” he tweeted.

In the same context. The European Central Bank (ECB) said in a report on financial stability released on Wednesday that the environment of financial stability in the Eurozone remains a challenge, as banks increased their exposure to high-risk assets to meet the challenges of profitability. The bank said investment funds and insurance companies have increased their investments in high-yield securities.

On the US side. Federal Reserve officials were more optimistic about the economy in late October than they were just six weeks ago, according to the minutes of the Bank's latest meeting. "Officials generally considered the economic outlook to be positive," the minutes said. "Uncertainties associated with trade tensions as well as geopolitical risks have declined somewhat, although they remain high." Monetary policy officials of the world's largest central bank confirmed that the US economy is resilient in the face of headwinds.

According to the technical analysis of the pair: I do not see any change in my technical outlook towards the price of the EUR/USD pair, the bullish correction still needs stability above 1.1120 resistance to confirm its strength of and thus pave the pair to test stronger peaks. On the downside, any move below 1.1000 support will end the bullish hopes and the pair will begin to complete its long-term downtrend.

As for the economic calendar data today: The ECB will announce the minutes of its monetary policy meeting and later the announcement of consumer confidence in the Eurozone. The US is to release the Philadelphia Industrial Index, jobless claims and existing home sales data.

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Mahmoud Abdallah
Mahmoud has been working fulltime in the Foreign Exchange markets for 12 years. Offers his analysis, articles and recommendations at the most renewed Arabic websites specialized in the global financial markets, and his experience gained a lot of interest among Arab traders. Works on providing technical analysis, market news, free signals and more with follow up for at least 12 hours a day, and aims to simplify forex trading and the concept of trading for his audience.