Slobodan Drvenica
Windsor Brokers
EUR/USD
EUR/USD remains biased lower as near term action stays within extended consolidation range above 13-month low (1.0495), with the upside being capped by solid barriers at 1.0600 zone (former low of Apr 16 / Fibo 23.6% of 1.0936/1.0495 / falling 10 DMA).
Negative 14-d momentum and daily MA’s in full bearish setup support scenario, with selling opportunities expected as long as upticks remain capped at 1.0600 zone.
Firm break of 1.0495 pivots to expose targets at 1.0448 (3 Oct 2023 low) and 1.0405 (50% retracement of 0.9535/1.1275).
Alternatively, violation of 1.0600 pivots would ease downside pressure, but sustained break above double-Fibo barrier at 1.0665 (23.6% of 1.1214/1.0495 / 38.2% of 1.0936/1.0495) will be needed to validate initial bullish signal.
Fundamentals remain overall negative for Euro, as Trump trades continue to inflate dollar and geopolitical uncertainty weigh strongly on risk mode.
Market focus shifts on Friday’s release of Eurozone PMI data (Manufacturing Nov 46.0 f/c and Services Nov 51.6 f/c, both indicators expected to remain unchanged from previous month), with divergence of Nov numbers from consensus to generate fresh direction signal.
Res: 1.0557; 1.0600; 1.0665; 1.0700.
Sup: 1.0495; 1.0448; 1.0405; 1.0290.
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The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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