The common currency failed to breach above the triple top pattern and retraced to the psychological 1.10 levels.

It formed a triple top pattern, indicating range bound action into the month-end.

 Ongoing trade owes: The near-term behavior price of the crude oil price depends on the progress of the trade talks between US-China.

 UBS said, “The Chinese trade negotiator, while “confused” by US demands, was sounding positive on a deal. Longer-term, there may be some costs associated with the US legislation – it adds uncertainty around global trade rules.”

With the lack of any significant positive news on the US-China trade deal, we expect trade to continue to remain range-bound over the coming days due to lack of clarity on Trade deal and 1.0990 and 1.0925 to remain crucial support in the near term.

Danske Bank said, “We expect a deal to be reached over the next month, but there have been reports that it could drag out further due to disagreements on tariff roll-back and Chinese agricultural purchases.”  

Data review: The latest PMI numbers in the eurozone are saying hello to stagnation.

The Eurozone economy remained close to stagnant for a third successive month in November, according to the flash PMI, losing growth momentum slightly again as new orders fell for a third straight month, IHS Markit reported.

  • Flash Eurozone Services PMI at 51.5 vs. 52.2 in October. 10-month low.
  • Flash Eurozone Manufacturing PMI at 47.1 vs. 46.6 in October. 3-month high.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “The eurozone economy remained becalmed for a third successive month in November, with the lackluster PMI indicative of GDP growing at a quarterly rate of just 0.1%, down from 0.2% in the third quarter.”

Data preview: 

In the EA, we have a quiet week ahead of us in terms of data releases. However, the focus will be on November inflation figures (Fri). Besides, France and Italy will release their updated estimates for 3Q GDP. We foresee another quarter of 0.3% q/q growth in France and a marginal increase to 0.1% from zero growth in Italy.

Turning to the inflation number, we’re expecting to see some pickup in inflation in the eurozone, Moody’s Analytics reported.

After softening to 0.7% y/y in October, the weakest in almost three years, there should be a slight increase to 0.8% in November.  

TECHNICAL OVERVIEW

In foreign exchange markets, the euro had depreciated against the US dollar, falling to its lowest level in a month in the wake of trade talks jitters calm down.

Before retracing to 1.10, the price of EURUSD traced out a near-term price top near 1.1180 in October 2019 via the formation of a multi- top pattern.

According to the daily charts, the key support level for EURUSD is placed at 1.0990, followed by 1.0950 and 1.0925. If the price manages to hold the pivotal of 1.0990, key resistance levels to watch out for are 1.1055 and 1.1100.

A move below 1.0990 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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