- EUR/USD has been consolidating after falling back from the European highs of 1.1434 where the pair made a low of 1.1391 at the start of North American time zone while markets were closed for Thanksgiving holidays.
- EUR/USD has been drifting higher since the start of the week’s slide from 1.1472 highs down to 1.1359 the low. Currently, EUR/USD is trading at 1.1401, static between the 21 and 10 4hr SMA.
EUR/USD was faded through the 38.2% fibo at the start of this week and has been reversing the supply back to 1.1434 where the greenback has been in retreat as the Fed trade starts to be scaled back on a deteriorating economic picture and prospects for Fed hikes down the line.
CPI and politics could weigh anchor advances
However, today’s Euro-area consumer confidence slipped to -3.9 (last:-2.7, mkt: -3.0), its lowest reading since March 2017 and reasserting 2018’s downward trend after October posted a small rise, as analysts at ANZ noted, also explaining that the Brexit uncertainty, the Italian budget saga, and a more fragile looking global economy are all factors likely to be weighing:
“The real test will be whether this translates into a further (and significant) weakening in consumer spending going forward. Indeed, minutes from the ECB’s October meeting suggested policy makers see risks to the outlook as skewed to the downside: “It was important to emphasize that the incoming information, while somewhat weaker than expected, remained overall consistent with an ongoing broad-based expansion of the euro area economy and gradually rising inflation”. Guidance around policy normalisation (the winding up of its bond purchasing programme at the end of the year and eventual lifting of interest rates) was broadly unchanged.”
EUR/USD levels
- Support levels: 1.1355 1.1310 1.1265
- Resistance levels: 1.1425 1.1460 1.1500
Valeria Bednarik, Chief Analyst at FXStreet explained that ahead of the Asian opening, the 4 hours chart for the pair shows that the neutral stance persists, with the price hovering a few pips below a flat 20 SMA and below the 23.6% retracement of the latest daily advance between 1.1215, the yearly low and 1.1472:
“In the same chart, the pair is in a range limited by the 100 SMA to the downside and the 200 SMA at the upside. Technical indicators lack directional strength, the Momentum below its 100 level and the RSI at around 55. The neutral stance will prevail as long as the pair remains between 1.1355 and 1.1460.”
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