The common currency ended marginally higher last week. At close, the EURUSD was a little higher, just four pips at 1.1020, while it was down more than a percent monthly.

Since early July, the price has been trading below 200MA and also traced out a triple top pattern (Weekly chart) between mid-October to early November. Based on these bearish factors, we strongly feel that euro bulls are not strong enough to change the altitude above the 1.1200 level. 

According to Nordea Markets, “New all-time-lows in 1M implied EUR/USD volatility.” 

Turning to the data prints, PMIs packed week with manufacturing and Services PMIs and EA revised Q3 GDP. On top of these data points, traders remain focused on US-China trade deal negotiations. 

Data review: Looking at the latest consumer sentiments data prints, GfK Consumer Climate Study Germany for November 2019 improved slightly, and Sentiment among German executives has improved a little. 

  • Recent Consumer sentiment data improved slightly and brought an end to the downward trend -at least for the moment. According to the official release, GfK Consumer Climate Study Germany for November 2019 has forecast a figure of 9.7 points for December, 0.1 index points higher than November’s level (9.6 points). 
  • Ifo Institute cited that, Sentiment among German executives has improved a little. The ifo Business Climate Index rose from 94.7 points in October to 95.0 points in November. Companies’ assessment of the current situation was slightly better.
  • Euro area annual inflation is expected to be 1.0% in November 2019, up from 0.7% in October according to a flash estimate from Eurostat. 

Data preview: We set our focus on Final services PMI and Final 3Q GDP estimate. Besides German IP also worth to watch out.  

TECHNICAL OVERVIEW

Our tactical view is that EURUSD will remain rangebound in the 1.0925-1.1200 range for the time being. This week’s data releases unlikely to shift that range materially, and the lack of new adverse developments on US-China deal negotiations may offer some respite to the EUR in the near-term. 

In case of decline 1.1000-1.0980 zone would act as a cushion.

According to the daily charts, the key support level for EURUSD is placed at 1.1000-1.0980, followed by 1.0950 and 1.0925. If the price manages to hold the above said support, key resistance levels to watch out for are 1.1030, 1.1055, and 1.1100. 

 

A daily close below 1.0980 could start the bearish C wave towards 1.0925.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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