It was a quiet week for fundamentals in the Eurozone, but the limited data was soft, as the eurozone is fighting a resurgence of Covid-19. Eurozone Consumer Confidence improved slightly but remains deep in negative territory, at -14. German GfK Consumer Climate fell to -7.3, down from -6.7.
In the US, Congress approved a massive stimulus package, but President Trump has thrown a monkey wrench in the process, saying he will veto the bill unless stimulus payments are substantially increased.
US Final GDP for the third quarter was revised upwards to 33.4%, up from 33.1%. Durable goods orders weakened in November, Headline durables dropped from 1.3% to 0.9%, while the core reading slumped to 0.4%, down from 1.3%. Consumer numbers worsened, as Personal Income came in at -1.1% and Personal Spending declined by 0.4%, its first decline in seven months. Unemployment Claims dropped sharply to 803 thousand, well below the estimate of 882 thousand.
- Spanish Flash CPI: Wednesday, 10:00. Inflation in the eurozone’s third-largest economy has been in contraction since March. This trend is expected to continue in December, with an estimate of -0.6%.
EUR/USD Technical analysis
Technical lines from top to bottom:
1.2478 was last tested in resistance in February 2018.
1.2328 is next.
1.2224 has held in resistance since April 2018.
1.2171 is an immediate support level.
1.2074 is next.
1.1970 (mentioned last week) since early December.
1.1844 is the final support line for now.
I remain bullish on EUR/USD
The Brexit deal between the UK and the European Union is good news for the euro, as it removed the uncertainty in the huge trading relationship between the sides. Still, with light trading during Christmas week, any gains by the euro will likely be limited.
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