EURUSD: testing 1.10
Fed`s pivoting is still a major topic among market participants. During the previous period, the majority of them were betting on the first rate cut during Q1 of the next year, while the latest data posted for inflation in the US are only further supporting their anticipation. The latest posted Personal Consumer Expenditure Prices final data for Q3 show a bit drop to 2.6%, from 2.8% expected by the market. The PCE Price Index was posted on Friday, showing a level of 2.6% and a modest decrease from anticipated 2.8% in November on a yearly basis. Core PCE reached a level of 3.2%. This index represents a major gauge for the Fed on where the inflation is heading, where drop has been positively perceived by the market, indicating that the Fed might start with rate cuts, in case that further decrease in prices continues. Final data for GDP growth in the Q3 this year, show an increase of 4.9% q/q, a bit lower from forecasted 5.2%. Still, it shows a strong resilience of the US economy, as anticipated both by the Fed and markets. Durable Goods orders were increased in November by 5.4% on a monthly basis, a way higher from forecasted 2.2%. For the week-end, Michigan Consumer Sentiment Final for December was posted with a level of 69.7, again higher from 69.4 expected by the market.
The US building permits preliminary for November reached 1.46M, a bit lower from expected 1.47M. The US Consumer Confidence in December beat the market estimate with the value of 110.7, a way higher from revised 101 or forecasted 104. This indicates a strong confidence among US retailers, which could be reflected in inflation during the year ahead.
Posted data for German Ifo Business Climate for December reached the value of 86.4, a bit less from market estimate of 87.8. German GfK Consumer Confidence for January reached level of -25.1, which was a bit better from forecasted 27. Euro Area Inflation rate final for November was -0.6% on a monthly basis, which was a bit lower from expected -0.5%. This drop led the yearly inflation to the level of 2.4% in November, which was in line with market expectations. At the same time, core inflation remained elevated at level of 3.6%, but a bit lower from previously posted 4.2%.
The eurusd started the previous week around 1.089 level and headed toward the resistance line at 1.10, which was clearly tested during the previous week. This is the second time that this resistance is tested during December. Both times the market did not have the strength to clearly break this level. The RSI was moving around level of 62 during the whole week, indicating that the market is still not ready to start the path toward the oversold side. Moving average of 50 days is getting closer to MA200 counterpart, with still a relatively slow distance between the lines. This is an indication of a potential so-called “golden cross” in the coming period, but certainly not by the end of this year.
Monday is a holiday day on Western markets, and it should not be expected that the Asian trading session might make a significant impact on the level of eurusd. Still, considering that the majority of market participants used the previous week to close positions for the year-end, it should not be also expected that the market will generally make any significant move in the week ahead. In this sense, there is an extremely low probability that the resistance line at 1.10 might be breached, while there is a small probability for a short reversal, but not below 1.09 level.
Important news to watch during the week ahead are:
Both Euro and USD markets are closed on Monday, without any important news scheduled for the week ahead.
The US building permits preliminary for November reached 1.46M, a bit lower from expected 1.47M. The US Consumer Confidence in December beat the market estimate with the value of 110.7, a way higher from revised 101 or forecasted 104. This indicates a strong confidence among US retailers, which could be reflected in inflation during the year ahead.
Posted data for German Ifo Business Climate for December reached the value of 86.4, a bit less from market estimate of 87.8. German GfK Consumer Confidence for January reached level of -25.1, which was a bit better from forecasted 27. Euro Area Inflation rate final for November was -0.6% on a monthly basis, which was a bit lower from expected -0.5%. This drop led the yearly inflation to the level of 2.4% in November, which was in line with market expectations. At the same time, core inflation remained elevated at level of 3.6%, but a bit lower from previously posted 4.2%.
The eurusd started the previous week around 1.089 level and headed toward the resistance line at 1.10, which was clearly tested during the previous week. This is the second time that this resistance is tested during December. Both times the market did not have the strength to clearly break this level. The RSI was moving around level of 62 during the whole week, indicating that the market is still not ready to start the path toward the oversold side. Moving average of 50 days is getting closer to MA200 counterpart, with still a relatively slow distance between the lines. This is an indication of a potential so-called “golden cross” in the coming period, but certainly not by the end of this year.
Monday is a holiday day on Western markets, and it should not be expected that the Asian trading session might make a significant impact on the level of eurusd. Still, considering that the majority of market participants used the previous week to close positions for the year-end, it should not be also expected that the market will generally make any significant move in the week ahead. In this sense, there is an extremely low probability that the resistance line at 1.10 might be breached, while there is a small probability for a short reversal, but not below 1.09 level.
Important news to watch during the week ahead are:
Both Euro and USD markets are closed on Monday, without any important news scheduled for the week ahead.
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