Eur/usd rises by 0.29% amidst contrasting economic signals from U.S. and Germany

EURUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.29%	30.3 Pips
Week to-date	0.05%	5.2 Pips
November	-3.68%	-401 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
Wed 01:30 PM USD GDP annual rate
Thu 01:00 PM EUR CPI Inflation Rate (12-mth)

What happened lately

In the United States, the economic data revealed a decrease in new-home sales for the month of October, reflecting a slower pace compared to the revised figure of 7% from the previous period. Conversely, the U.S. House Price Index witnessed an upward movement, rising to 0.7% in September from a revised 0.4% in August, as reported by the Federal Housing Finance Agency. This indicates a continuing appreciation in house prices despite the downturn in new home sales, suggesting a potentially constrained housing supply or increased demand for existing homes.

Germany’s economic landscape, as conveyed by the ifo Institute, has shown signs of decline in November with various indices indicating a pessimistic business environment. The ifo Current Assessment index decreased to 84.3 points from 85.7 points in October, reflecting growing concerns about the current economic conditions. Similarly, the ifo Expectations index saw a marginal decline from 87.3 to 87.2 points, indicating cautious sentiment about future economic prospects. Additionally, the ifo Business Climate Index fell from 86.5 to 85.7 points, reinforcing the picture of a subdued business climate.

The EURUSD pair has risen by 0.29% to 1.04851 amidst a backdrop of mixed economic signals from the U.S. and Germany. The flattening of economic optimism in Germany contrasts with persistent inflation concerns and adjustments in the housing market in the U.S. The release of upcoming economic indicators—such as the U.S. PCE Price Index excluding food and energy and GDP annual rate, along with Germany’s Consumer Price Index (CPI) Inflation Rate—will be instrumental in shaping the movement of the EURUSD. Should the upcoming data suggest stronger U.S. economic recovery or steeper inflationary pressure, the U.S. dollar may find support, potentially suppressing the euro in the pair. However, if euro area inflation data demands a more hawkish ECB posture, the euro might gain strength, further impacting the pair’s dynamics. As markets anticipate these high-impact releases, the EURUSD remains in a state of consolidation, awaiting direction from decisive data insights.

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What can we expect from EURUSD today?

EURUSD on Tuesday rose 0.29% to 1.04851. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.04249 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.05448 or trades above daily pivot 1.04848. Break above could target R1 at 1.05451. While to the downside, we are looking at 1.04249 (S1) and daily low of 1.04246 as support levels. EURUSD need to break on either side to indicate a short-term bias. A break above 1.05448 may suggest continuation after recent positive movement.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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