EURUSD Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.3% | -32 Pips |  |
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| Week to-date | -1.74% | -186.1 Pips | |
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| November | -3.28% | -357.3 Pips |  |
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Upcoming key events (London Time)
Fri 01:30 PM USD Monthly Retail Trade (1-mth)
What happened lately
In the United States, recent economic indicators exhibit a modest uptick in inflationary pressures. According to the Bureau of Labor Statistics, the Producer Price Index (PPI) saw a slight increase of 0.2% in October compared to the previous month, while the 12-month PPI escalated to 2.4%, up from a revised 1.9%. Furthermore, when excluding volatile food and energy sectors, the PPI rose by 0.3% month-over-month and 3.1% over the year, slightly above previous figures. Meanwhile, the Consumer Price Index (CPI) in October showed a stable 0.2% monthly increase, with a yearly rate accelerating to 2.6%. Excluding food and energy, both the monthly and 12-month CPI growths remained constant at 0.3% and 3.3% respectively. On the labor front, initial unemployment claims decreased to 217,000 in the week ending November 9, reflecting continued labor market robustness, as reported by the Department of Labor.
Turning to the Euro Area, economic growth maintains a stagnant profile. Eurostat’s flash estimate reveals that the region’s GDP growth for the third quarter persisted at a slow 0.9% year-on-year and 0.4% quarterly. Additionally, industrial production in September saw a significant downturn, dropping to -2% from a revised 1.5% in August, denoting persistent manufacturing challenges. Employment growth also remained steady, with a mere 0.2% quarterly rise in Q3. These figures underscore a struggling economic recovery with little momentum for acceleration in the Euro area.
Considering the latest economic releases, the EUR/USD was observed to have fallen by 0.3% to 1.05288. The diverging economic indicators between the U.S. and the Euro area are likely exerting downward pressure on the euro against the dollar. The U.S., with elevated inflation and a supportive job market, may signal potential monetary tightening, thereby bolstering the dollar. In contrast, the Eurozone’s stagnant growth and declining industrial output could imply further accommodative measures by the European Central Bank, weakening the euro. These dynamics, alongside any upcoming economic data such as the U.S. monthly retail trade figures, are pivotal in shaping the currency pair’s trajectory.
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What can we expect from EURUSD today?
EURUSD on Thursday dropped -0.3% to 1.05288. Price is below 9-Day EMA while Stochastic is falling in oversold zone.
Updated daily direction for EURUSD looks bearish as the pair posted lower in Thursday trading session.
Looking ahead for the day, immediate support level is at S1 1.04889 with break below could see further selling pressure towards S2 at 1.0449. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.05825 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.04958 would indicate selling pressure.
For the week to-date, take note that EURUSD is bearish as the pair posted lower by -1.74%.
Key levels to watch out:
| R3 | 1.06623 |
| R2 | 1.06224 |
| R1 | 1.05756 |
| Daily Pivot | 1.05357 |
| S1 | 1.04889 |
| S2 | 1.0449 |
| S3 | 1.04022 |
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