Chart of the Day - EURUSD
Bearish EURUSD - EUR: Eurozone consumer confidence improved in November: The preliminary reading of the European Commission Consumer Confidence Index came in higher at -7.2 in November (Oct: -7.6) to indicate a slight improvement in Euro Area consumer sentiment. This morning’s PMI data was mixed with emerging softness in the services component a cause for concern. The new head of the ECB Christine Lagarde spoke this morning, giving few hints around policy, especially after the contentious decision in September to lower rates and restart QE. In particular, she intends to heal divisions within the Governing Council. She also called for a strategic review of broader policy
USD: US Philly Fed Index edged up; initial jobless claims unchanged: The Philadelphia Fed Manufacturing Survey reported that its general business activity index rose nearly 5pts to 10.4 in November (Oct: 5.6), mainly supported by firms’ brighter outlook as the gauge of current state of new orders, shipments and unemployment dropped. The “six-month from now” general business activity rose 2pts as firms see better new orders and employment. On a separate note, initial jobless claims amounted to 227k for the week ended 16 Nov (previous: 227k revised), unchanged from the revised figure in the week before, leaving the 4-week moving at a higher 221k (previous: 217.5k) thus offering signs of a softer labour market. The Conference Board Leading Index slipped for the third straight month by 0.1% MOM in October (Sep: -0.2% revised, dragged down by negative contributions from ISM new orders, average workweek, stock prices and interest rate spread. US existing home sales rebounded in October: Existing home sales which make up majority of US housing market rebounded to increase 1.9% MOM in October (Sep: -2.5% revised) following a contraction in September, a welcoming news that the housing market is on a gradual course of recovery amidst lower interest rates environment. Sales have been increasing for the most part of the year and the latest rebound suggests that demand continues to pick up momentum.
From a technical and trading perspective, the EURUSD has stalled at the monthly pivot and the mid point of the midpoint of the volatility, this area also represents symmetry swing resistance. Yesterday's close was a key day reversal which flipped the daily chart bearish as per the near term volume weighted average price, as such I will venture short on a new low today with a stop above todays high targeting a move to test bids towards 1.0960 where price is potentially going to carve out an inverse head and shoulders pattern.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!