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EUR/USD decline: November’s Focus on Private Sector PMIs

EUR/USD decline: November's Focus on Private Sector PMIs

On Wednesday, the EUR/USD decline of 0.21%. Following a 0.27% decrease on Tuesday, the day concluded with the EUR/USD at $1.08882. The currency pair reached a peak of $1.09229 before descending to a nadir of $1.08522.

Analysis of Euro Area Economy

Thursday will witness scrutiny of the euro area economy, particularly through the examination of November preliminary private sector Purchasing Managers’ Index (PMI) data for France, Germany, and the Eurozone. Investors are likely to show interest if there is evidence of a less pronounced contraction in the private sector. Signaling a potential increase in demand.

However, it is imperative for investors to delve into the subcomponents of the PMIs, including new orders, prices, and employment. An increase in price pressures may indicate a surge in consumer price inflation. Potentially influencing discussions within the European Central Bank (ECB) regarding the timing of rate cuts.

Influence of Service Sector PMIs on EUR/USD Momentum

The influence of service sector PMIs on the EUR/USD’s momentum anticipated to be substantial. Given that services contribute over 70% to the euro area economy. Notably, the service sector stands as a key driver of inflation in the Eurozone.

Economists are projecting a rise in the Eurozone Manufacturing PMI from 43.1 to 43.4 in November. Additionally, a growth in the Services PMI from 47.8 to 48.1 expected.

Also Read: EUR/USD Rise: Eyes on Private Sector PMIs and Central Banks

Against the backdrop of the private sector PMIs, investors should closely monitor commentary from the ECB. ECB Executive Board member Isabel Schnabel is scheduled to speak, and reactions to both the PMI data and statements related to interest rates warrant careful consideration.

EUR/USD decline Analysis: Market Trends, Resistance Levels

The EUR/USD has consistently maintained its position above both the 50-day and 200-day Exponential Moving Averages (EMAs), thereby affirming positive signals in favor of a bullish market trend.

A breach of the $1.09294 resistance level in the EUR/USD would potentially trigger the activation of the $1.10720 resistance level.

The focal points for Thursday’s session centered around the private sector Purchasing Managers’ Indices (PMIs) within the Eurozone.

However, a potential dip in the EUR/USD to $1.08500 could embolden bearish sentiments, leading to a challenge of the $1.07838 support level.

The 14-period Daily Relative Strength Index (RSI), currently at 65.84, indicates that the EUR/USD might surpass the $1.09294 resistance level before entering the overbought territory.

EUR/USD decline Market Analysis: Positioning, Potential Momentum, and Key Levels to Watch

The EUR/USD remains positioned above both the 50-day and 200-day Exponential Moving Averages (EMAs), reinforcing bullish signals in the market.

Should the EUR/USD surpass the $1.09294 resistance level, it could potentially fuel bullish momentum, creating an opportunity to challenge the $1.10720 resistance level.

However, a breach of the 50-day EMA in the EUR/USD might bring the $1.07838 support level into consideration.

On the 4-hour chart, the 14-period Relative Strength Index (RSI) stands at 54.32, suggesting that the EUR/USD could retreat to $1.10 before entering into overbought territory.


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