Eurusd rises amid mixed economic indicators in US and declining consumer confidence in Germany

EURUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.69%	72.9 Pips
Week to-date	0.81%	85.1 Pips
November	-2.95%	-321.1 Pips

Upcoming key events (London Time)

Thu 01:00 PM EUR CPI Inflation Rate (12-mth)

What happened lately

In the United States, economic indicators show a mixed picture. Consumer spending, measured by the Personal Consumption Expenditures (PCE), decreased slightly in October to 0.4% from 0.5% in September, as reported by the Bureau of Economic Analysis. The country’s Personal Income, however, saw a notable increase of 0.6% from 0.3% in the same period. The U.S. PCE Price Index, excluding food and energy, showed a minor uptick to 2.8% from 2.7% on a yearly basis, while on a monthly basis, it remained steady at 0.3%. Interestingly, the index covering all items registered a modest increase from 2.1% to 2.3% annually. Meanwhile, housing market indicators exhibited some weakness; pending home sales declined significantly to 2% from 7.4%, and new home sales were also negatively affected. Durable Goods Orders excluding Transportation saw a minimal rise of 0.1%, which is a drop from the previous month, yet orders excluding defense rebounded to 0.4%. The GDP annualized rate for Q3 remained steady at 2.8%, reflecting stable growth despite fluctuations in other areas. According to the Department of Labor, initial unemployment claims saw a minor drop from the earlier revised numbers.

In Germany, the latest data presents a concerning sign of declining consumer sentiment. The GfK Consumer Confidence Survey for December reported a drop to -23.3 points, down from the previously revised figure of -18.4 points in November. This indicates that consumers in Germany are increasingly pessimistic about the future economic environment, possibly due to inflationary concerns or broader economic uncertainties.

The data from the United States and Germany could influence the EURUSD exchange rate. The rise in the pair to 1.05650 on Wednesday reflects market expectations and reactions to the latest economic releases. The mixed economic data from the U.S. failed to provide a strong bullish case for the dollar; however, signs of resilience in certain areas like personal income might prevent further dollar weakening. Concurrently, bearish consumer confidence data in Germany could weigh on the euro. Nonetheless, upcoming high-impact events such as the European CPI Inflation Rate announcement could heavily sway market sentiment. Should the inflation data from the Eurozone show significant changes, it can affect the EURUSD pairing due to shifts in interest rate expectations. Therefore, traders will likely remain cautious ahead of this release, factoring in potential volatility and adjustments in long-term economic policy outlooks in the U.S. and Europe.

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What can we expect from EURUSD today?

EURUSD on Wednesday rose 0.69% to 1.05650. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks bullish as the pair ended higher after Wednesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.06105 with break above could target R2 at 1.06561 or figure level area. While towards the downside, we are looking at daily low of 1.04740 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.05878 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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