- US dollar gains momentum across the board supported by recent US data.
- EUR/USD extends reversal from two-week highs, accelerates slide.
The EUR/USD pair broke below 1.1045 and fell to 1.1029, hitting the lowest level in a week. It is trading near the lows, with a bearish bias, holding firm to daily and weekly losses.
A stronger US dollar across the board boosted the decline in EUR/USD. The US Dollar Index (DXY) is up 0.20% while US bond yields are modestly higher. Economic data supported the greenback. The Markit Manufacturing PMI rose to 52.2 in November according to preliminary data, surpassing expectations. Also the service sector PMI came in above market consensus at 51.6; both reaching their strongest readings in months.
Later, the consumer sentiment index from the University of Michigan was released. It rose to 96.8 in November from 95.5. “It has been 20 months since consumer sentiment peaked in this cycle, but the bottom has not fallen out. Solid gains in household finances are still on track to sustain spending going into the crucial holiday season”, explained Wells Fargo analysts.
Technical outlook
The EUR/USD is accelerating to the downside, with technical favoring further losses. Now it is testing the 1.1030; below that level the next short-term support comes at 1.1015 and then 1.1000. On the upside, immediate resistance is seen at 1.1045 followed by 1.1060 (20-hour moving average).
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