Daily Price Outlook
The EUR/USD closed at $1.1246 after setting a high of $1.1276 and a low of $1.1226. On Tuesday, the EUR/USD broke a two-day bearish streak and surged. The EURUSD gains remained consolidated as the pressure of a strong USD weighed on the currency pair, while the single currency euro gained strength on the back of positive macroeconomic data.
The US dollar was strong on the board as it rose for a third consecutive session and reached its highest level in 16 months at 96.61. Similarly, the US Treasury yield on the benchmark 10-year note also rose on Tuesday and reached 1.68%, strengthening the US dollar. However, the strong USD failed to extend losses in the EUR/USD on Tuesday, as the pair reversed course and posted small gains for the day.
The improved market data pushed the euro higher against its rival currencies on Tuesday. The PMI data showed that both the manufacturing and service sectors in Europe improved in November, adding strength to the single currency Euro and turning the momentum of EUR/USD.
At 13:15 GMT, the French Flash Services PMI in November surged to 58.2 against the projected 55.6 and supported the single currency euro and added further gains in EUR/USD. The French Flash Manufacturing PMI also surged to 54.6 against the forecasted 53.1 and supported the Euro, adding further gains in EUR/USD. At 13:30 GMT, the German Flash Manufacturing PMI also surged to 57.6 against the predicted 57.0, which supported the Euro and added further upward momentum in EUR/USD.
The German Flash Services PMI also increased to 53.4, against the expected 51.4, and supported the Euro, adding further gains in EUR/USD. At 14:00 GMT, the Flash manufacturing PMI from the Eurozone rose to 58.6 against the anticipated 57.5 and supported the Euro, which pushed EUR/USD higher. The Flash Services PMI from the Eurozone also increased to 56.6 from an estimated 53.6 and supported the Euro, adding further upward momentum in EUR/USD.
From the US side, at 19:45 GMT, the Flash Manufacturing PMI remained flat with projections of 59.1. The Flash Services PMI in November declined to 57.0 from the predicted 59.1 and weighed on the US dollar, which added further gains in EUR/USD. At 20:00 GMT, the Richmond Manufacturing Index rose in November to 11 from the anticipated ten and supported the US dollar. That capped further gains in EUR/USD.
However, the gains in EUR/USD were limited on Tuesday because of the fresh lockdown measures imposed in Austria for 20 days. Other European countries, including the region's largest economy, Germany, were also considering imposing lockdown measures, weighing on the euro and limiting further EUR/USD gains.
EUR/USD Intraday Technical Levels
Support Resistance
1.1211 1.1274
1.1189 1.1315
1.1149 1.1336
Pivot Point: 1.1252
EUR/USD - Technical Outlook
The EUR/USD bearish bias seems to be getting weaker as the pair managed to survive above the 1.1225 support level. On the 4-hour timeframe, the EUR/USD has formed a descending triangle pattern that’s extending support at 1.1225 along with resistance at 1.1249.
The increased demand in EUR/USD, as well as the break through the 1.1249 barrier, exposes the pair to 1.1273 or 1.1298. Alternatively, a break below the 1.1224 level exposes the EUR/USD pair towards the 1.1212 and 1.1190 levels on the bearish side. The RSI and stochastic are holding in a sell zone. Therefore, the EUR/USD’s trading bias remains bearish below 1.1249 and vice versa. All the best!
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