EUR/USD: the European currency is trading flat
Current trend
Quotes of the European currency are trading flat on the back of the strengthening of the US dollar.
The day before investors followed the publication of a block of macroeconomic data from the United States, which, in general, turned out to be positive. GDP for Q3 2021 was 2.3%, which is better than the preliminary market estimates of 2.1%, while the GDP deflator was in line with expectations at around 5.9%. The December Consumer Confidence Index from the Conference Board was fixed at 115.8 points, which is an excellent result, given the expert forecast of 110.8 points. Existing Home Sales also rose 1.9% in November to 6.46M in quantitative terms. However, the market is in no hurry to react to news that is positive for the dollar. After the publication of macroeconomic data, EUR/USD pair continued its uptrend towards 1.1340. It is likely that traders are looking for better prices to open short positions before a new impetus.
In the absence of significant releases in the euro area this week, investors are analyzing statements from representatives of the European Central Bank (ECB). According to the Governing Council member Robert Holtzman, the board may raise rates as early as the end of next year, and the winding down of the bond purchase program will be a strong signal that this will happen over the next two quarters. It is worth noting that the European regulator, like the US Fed, will probably not raise rates until the suspension or complete termination of the bond purchase program. In the absence of decisive action from the ECB, EUR/USD will remain under pressure amid a diverging approach of the financial authorities to the monetary policy by regulators.
Support and resistance
The long-term trend in EUR/USD is downward. Throughout December, the price has been testing the resistance level of 1.1340 and cannot break it. Accordingly, if this level is held, the instrument price can be expected to fall to 1.1195.
The mid-term trend is also downtrend. The key resistance is in the range of 1.1380–1.1362, while the "bears" target is at the November low. To change the trend, buyers need to break out 1.1380 and consolidate above it. In this case, the target for purchases will be target zone 2 (1.1556–1.1538).
Resistance levels: 1.1340, 1.1530.
Support levels: 1.1235, 1.1195, 1.1067.
Quotes of the European currency are trading flat on the back of the strengthening of the US dollar.
The day before investors followed the publication of a block of macroeconomic data from the United States, which, in general, turned out to be positive. GDP for Q3 2021 was 2.3%, which is better than the preliminary market estimates of 2.1%, while the GDP deflator was in line with expectations at around 5.9%. The December Consumer Confidence Index from the Conference Board was fixed at 115.8 points, which is an excellent result, given the expert forecast of 110.8 points. Existing Home Sales also rose 1.9% in November to 6.46M in quantitative terms. However, the market is in no hurry to react to news that is positive for the dollar. After the publication of macroeconomic data, EUR/USD pair continued its uptrend towards 1.1340. It is likely that traders are looking for better prices to open short positions before a new impetus.
In the absence of significant releases in the euro area this week, investors are analyzing statements from representatives of the European Central Bank (ECB). According to the Governing Council member Robert Holtzman, the board may raise rates as early as the end of next year, and the winding down of the bond purchase program will be a strong signal that this will happen over the next two quarters. It is worth noting that the European regulator, like the US Fed, will probably not raise rates until the suspension or complete termination of the bond purchase program. In the absence of decisive action from the ECB, EUR/USD will remain under pressure amid a diverging approach of the financial authorities to the monetary policy by regulators.
Support and resistance
The long-term trend in EUR/USD is downward. Throughout December, the price has been testing the resistance level of 1.1340 and cannot break it. Accordingly, if this level is held, the instrument price can be expected to fall to 1.1195.
The mid-term trend is also downtrend. The key resistance is in the range of 1.1380–1.1362, while the "bears" target is at the November low. To change the trend, buyers need to break out 1.1380 and consolidate above it. In this case, the target for purchases will be target zone 2 (1.1556–1.1538).
Resistance levels: 1.1340, 1.1530.
Support levels: 1.1235, 1.1195, 1.1067.
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