EUR/USD analysis: weaker dollar lifts the common currency
EUR/USD Current price: 1.1641
- US tax reform seen coming in 2019, dollar hit.
- EU on track to grow at its fastest pace in a decade this year.
The greenback sagged this Thursday, on speculation that the US tax reform would be delayed one year. The American currency attempted to recover some ground at the beginning of the US session, but poor data, alongside with confirmations on the tax delay, sent it back down. The EUR/USD pair rose to its highest for the week at 1.1654 and settled near it jumping on headlines indicating that Senate Republicans plan to propose delaying a cut in the US corporate tax until 2019. The House Republicans discussed earlier in the day the possibility of applying the tax reform in 2018, but the debate couldn't prosper, as the total amount the cut implies is beyond what they are permitted under budget rules. The US released its weekly unemployment claims report, which showed that In the week ending November 4 initial claims were 239,000, an increase of 10,000 from the previous week's unrevised level of 229,000. In Europe, on the other hand, the European Commission Autumn forecast, showed that the euro area economy is on track to grow at its fastest pace in a decade this year, with real GDP growth forecast at 2.2% up from previous 1.7%, while the EU economy as a whole is also set to beat expectations with robust growth of 2.3% this year, revised 1.9% in spring.
The pair holds on to its intraday gains, short-term poised to extend its advance according to technical readings in the 4 hours chart, as indicators head north well into positive territory, while the price recovered above its 20 SMA, now slowly turning higher around 1.1600. In the wider picture, however, the upward potential is still limited, given that the price is below the 1.1660region, where it bottomed since early August and until the end of October. Spikes towards 1.1690 were quickly reversed last week, with the pair unable to settle above the key resistance area. That said, the EUR/USD pair could only enter in a bullish stage on a recovery beyond the 1.1720 region.
Support levels: 1.1550 1.1510 1.1460
Resistance levels: 1.1660 1.1690 1.1720
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
