ANALYSIS EUR/USD
- EZ consumer confidence and sentiment data did not provide any market moving info with EUR/USD largely unchanged.
- Now, the focus shifts to German and EZ CPI.
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EURO FUNDAMENTAL BACKDROP
Eurozone consumer confidence for November came in as expected (see below economic calendar), but signs that there was an industrial slowdown were revealed after actual data were not available. This could be related to both global recessionary fears as well as the Chinese influence on demand-side variables.
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EUR/USD ECONOMIC CALENDAR
Source: DailyFX economic calendar
Yesterdays’ hawkish commentary from Fed officials as well as China’s ongoing COVID crisis did not hold today after China is said to have deescalated tensions giving a boost to the euro – EZ has strong ties to China which can expose the euro to weakness in the event of negative Chinese news. The ECB’s Christine Lagarde also mentioned that interest rate have a long way to go yesterday but today’s German inflation read could serve as a precursor to the eurozone CPI print tomorrow. Spanish inflation has been disappointing so far. Should German and EZ data follow Spanish lead, the euro could move lower against the greenback.
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TECHNICAL ANALYSIS
EUR/USD DAILY CHART
Chart created by Warren VenketasIG
Although EUR/USD’s price action was not affected by the consumer confidence release (black), the rising wedge pattern (black), could indicate a possible downside. The rising wedge formation is usually seen in a previous downtrend but an uptrend can still produce similar results. The 200-day SMA, (blue) is another important point as the EUR/USD currency pair has failed to stabilize above this area of confluence. Yesterday’s long upper wick provides additional support for a consequent downturn.
Resistant levels
Support levels:
- 1.0369
- Support for wedge
- 1.0198
IG CLIENT SENTIMENT DATA : MIXED
IGCS shows that retail traders are at the moment SHORT EUR/USD 54% As of writing, many traders are holding short positions. DailyFX is known for its contrarian approach to crowd sentiment, but recent changes in short and long positioning have led us to favor a short-term cautious bias.
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