Chart of the Day EURUSD
Bearish EURUSD - EUR: Eurozone final GDP unrevised; retail sales contracted in October ahead of holiday seasons: The final reading of Eurozone 3Q GDP growth was unrevised at 0.2% QOQ (2Q: +0.2%) leaving the annual pace of growth unchanged as well at 1.2% (2Q: +1.2%). The latest employment data meanwhile showed that hiring continued to slowed in the third quarter recording a meagre 0.1% QOQ growth (2Q: +0.2%). Compared to the same period last year, employment growth also pulled back to 0.9% YOY (2Q: +1.2%). On the retail front, retail sales recorded its largest contraction this year at -0.6% MOM in October (Sep: -0.2% revised) following a newly downward revision to September figure, led by declines in sales of electrical goods, furniture, textiles, clothing, pharmaceuticals, non-food products. The decline nonetheless could be followed by a rebound in November as the holiday season began. The ECB meet on Thursday and are expected to leave all its key interest rates steady and the spotlight will be on new ECB President Christine Lagarde’s first press conference.
USD: The US nonfarm payrolls figure for November came in very strongly, at 266k compared to market expectations of 180k. Furthermore, it came with some rainbow sprinkles on top with 41k upward revisions in the jobs figures for the prior two months. Jobless rate fell to 3.5%, in line with the lowest rate in half a century. Average hourly earnings went up by 3.1% yoy, higher than the 3.0% expected. In short, it was an all around encouraging set of employment prints that would help to counter concerns of how weakness in manufacturing sector might impact the services sector which is the core of the US economy. For good measure, Michigan’s consumer sentiment index hit a seven month high level of 99.2 for the December’s preliminary readings, compared to 96.8 in November. Such numbers will help the FOMC members – who are meeting for the last time this year on Dec 11-12, to continue their recent narrative of how the US economy is in a good place and does not require any additional monetary accommodation beyond the three rate cuts that they have decided upon.
From a technical and trading perspective, as 1.1070/80 caps upside attempts look for another leg of downside to test bids and stops below 1.1000. Fridays candle printed a key reversal flipping the near term volume weighted average price negative. On the week only a close back above 1.1100 would concern the near term bearish bias
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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!