Key Highlights
- EUR/USD failed to climb above the 1.1100 resistance and resumed its downward move.
- There was a break below a consolidation pattern with support at 1.1055 on the 4-hours chart.
- The US Manufacturing PMI climbed higher from 51.3 to 52.2 in Nov 2019 (Prelim).
- The German IFO Business Climate Index is likely to rise from 94.6 to 95.0 in Nov 2019.
EUR/USD Technical Analysis
This past week, the Euro recovered above the 1.1050 and 1.1080 resistance levels against the US Dollar. However, EUR/USD struggled to continue above the 1.1100 resistance and resumed its downward move.
Looking at the 4-hours chart, the pair formed a top near the 1.1096 level and later started a fresh decline. It broke the 1.1080 support, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
Moreover, there was a break below a consolidation pattern with support at 1.1055. It opened the doors for more losses and the pair broke the 61.8% Fib retracement level of the recovery wave from the 1.0989 low to 1.1096 high.
It seems like the pair might continue to decline towards the 1.1000 and 1.0990 support levels. The next major support is seen near the 1.0950 level or the 1.236 Fib extension level of the recovery wave from the 1.0989 low to 1.1096 high.
On the upside, the previous supports near the 1.1060 and 1.1055 levels are likely to act as hurdles. Besides, a successful close above 1.1100 and the 100 SMA is needed for a nice upward move towards 1.1200.
Fundamentally, the US Manufacturing PMI for Nov 2019 (Prelim) was released by the Markit Economics. The market was looking for a minor increase from 51.3 to 51.5.
However, the actual result was better than the forecast, as the US Manufacturing PMI jumped higher to 52.2. Looking at the US Services PMI, there was an increase from 50.6 to 51.6.
Overall, EUR/USD is back in a bearish zone and it could extend losses below 1.1000. Similarly, GBP/USD started a fresh decline and broke the key 1.2850 support area.
Upcoming Economic Releases
- German IFO Business Climate Index for Nov 2019 – Forecast 95.0, versus 94.6 previous.
- German IFO Current Assessment Index Nov 2019 – Forecast 98.0, versus 97.8 previous.
- German IFO Expectations Index for Nov 2019 – Forecast 92.5, versus 91.5 previous.
- Dallas Fed Manufacturing Business Index for Nov 2019 – Forecast -0.43, versus -0.45 previous.
