Key Highlights

  • This past week, EUR/USD climbed above the 1.1050 and 1.1100 resistance levels.
  • A key rising channel is forming with support near 1.1100 on the 4-hours chart.
  • GBP/USD corrected sharply after tagging the 1.3500 resistance area.
  • The US Manufacturing PMI could decline from 52.6 to 52.4 in Dec 2019 (Preliminary).

EUR/USD Technical Analysis

This past week, the Euro started a steady increase above the 1.1050 resistance area against the US Dollar. EUR/USD even surged above 1.1100 before it ran into the 1.1200 resistance area.

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Looking at the 4-hours chart, the pair settled above the 1.1100 resistance, the 100 simple moving average (red), and the 200 simple moving average (green).

A high was formed near 1.1199 before the pair started a downside correction. There was a break below the 1.1150 level, and the 38.2% Fib retracement level of the upward move from the 1.1039 low to 1.1192 high.

However, there are many supports on the downside, starting with 1.1100. Moreover, there is a key rising channel is forming with support near 1.1100 on the same chart.

The 61.8% Fib retracement level of the upward move from the 1.1039 low to 1.1192 high is also near the channel support area. If there is a downside break below the 1.110 support area, the pair could correct further towards the 1.1050 support zone.

Fundamentally, the US Retail Sales report for Nov 2019 was released by the US Census Bureau this past week. The market was looking for an increase in sales by 0.5% compared with the previous month.

However, the actual result was disappointing, as the US Retail Sales rose only 0.2% in Nov 2019. Looking at the Retail Sales ex Auto, there was a 0.1% increase, less than the last revised 0.3%.

The report added:

Advance estimates of U.S. retail and food services sales for November 2019, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $528.0 billion, an increase of 0.2 percent (±0.4 percent) from the previous month, and 3.3 percent (±0.7 percent) above November 2018.

Overall, EUR/USD could recover as long as it is above 1.1050. Similarly, GBP/USD remains well supported above 1.3200 and 1.3250.

Upcoming Economic Releases

  • Germany’s Manufacturing PMI for Dec 2019 (Preliminary) – Forecast 44.5, versus 44.1 previous.
  • Germany’s Services PMI for Dec 2019 (Preliminary) – Forecast 52.0, versus 51.7 previous.
  • Euro Zone Manufacturing PMI Dec 2019 (Preliminary) – Forecast 47.1, versus 46.9 previous.
  • Euro Zone Services PMI for Dec 2019 (Preliminary) – Forecast 52.0, versus 51.9 previous.
  • UK Manufacturing PMI for Dec 2019 (Preliminary) – Forecast 49.4, versus 48.9 previous.
  • UK Services PMI for Dec 2019 (Preliminary) – Forecast 49.6, versus 49.3 previous.
  • US Manufacturing PMI for Dec 2019 (Preliminary) – Forecast 52.4, versus 52.6 previous.
  • US Services PMI for Dec 2019 (Preliminary) – Forecast 51.4, versus 51.6 previous.

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