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EURUSD plunged to the month-lowest level last week due to the strong dollar, and had a correction on several past sessions. However, early Tuesday, the pair continues the down trend.

On Tuesday, at 3:11 (GMT), the pair traded at 1.05932, down 0.2% from Monday close price after ECB President Mr Mario Draghi’s testimony.

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Fig EURUSD D1 chart

  • Factors that cover EUR

There are many data, which had huge effects on EURUSD, published last week. Following a report from Markit, French Flash Manufacturing PMI in November was in line with the expectation of 51.5, which implied the industry expansion. However, the data this month was still lower than 51.8 level last month. One more indicator from France was French Flash Service PMI. It was estimated to reach the 52.6 level, higher than that in October. Analysts had expected it to climb to 52.1 level. One of the leading countries in Eurozone, German, showed a mixed data about PMI. While German Flashing Manufacturing PMI decreased to 54.4 from 55.0 last month, its flashing service PMI rose to 55.0.

According to Markit’s report, Euro flashing PMI for manufacturing this month is 53.7 and for service is 54.1. Both showed a positive picture of Eurozone economy, which might push EURUSD higher.

Last Friday, Italian retail sales in September was released and failed to meet the expectation of 0.0% gain. It fell 0.6% month-on-month, lower than that in the previous month. However, this data did not hugely affect the pair.

On Monday, ECB President Mario Draghi had a speech about ECB’ economic outlook. Although Eurozone economy has recovered after U.K referendum, he still warned that the consequences from Brexit would “vary across countries depending on their trade links with U.K”. In addition, he also warned about the negative effects of stalling recovery.”Right now the greatest risk comes from impaired growth,” he said, “The greatest risk comes from the possibility the recovery doesn’t firm up and stalls.” On December 8th, ECB will have a meeting to discuss and give the decision on whether to extend its bond-buying program or not.

Governor of the Bank of Greece, Mr. Yannis Stournaras said on Friday that ECB might consider stretching its asset purchasing programs.

An event related to Italian political issues will occur on this Sunday, when Italians will vote for constitutional changes proposed by Italian Prime Minister Matteo Renzi. If Italians choose to reject this proposal, Prime Minister will resign, raising opportunity for the oppose party, Five Star Movement. And it might open a bigger chance for a referendum to leave Europe in Italia.

Furthermore, Germany is scheduled to release its preliminary consumer price inflation and retail sales this week.

  • Factors that cover USD

Last week saw a significant increase of U.S dollar’s value, which dragged EURUSD pair down strongly. However, from last Friday, the greenback has been in a correction.

After surging to the highest level on Wednesday, USD adjusted and traded at 100.75 at 2:55 (GMT) on Monday’s session.

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Fig USDX D1 Chart

After strongly increasing due to positive economic data released last week and market optimism, dollar slid slightly. Although the greenback’s value declined against other major currencies on Monday, the market still bet for dollar’s increase due to high expectation for Fed rate hike in December’ meeting. Furthermore, the market put hopes on Trump’s administration  when he proposed the fiscal spending on infrastructure and tax cut, which might pushing the economic growth in the future.

Besides that, there are crucial U.S economic data published this week. The most important data is non-farm payroll, which is released on Friday. Fed will partly base on this data to decide whether to raise interest rate or not.

Institute of supply management is to publish November manufacturing PMI on Thursday. Analysts expected it to be 52.1, which is higher than the readings of 51.9 in October.

Technical Analysis

eurusd-29-d1-1

Fig EURUSD D1 chart

After plunging to the low level on Wednesday due to high value of U.S dollar, the pair created a doji, indicating that the sellers might be exhausted. From Friday session, the pair managed to rise back when the buyers showed their power. However, buying pressure was not strong enough to push the price to go higher. After reaching the highest intraday level of 1.06856 on Monday, EURUSD continues to go down.

RSI (14) has been moving under 30 threshold for several days, showing the sellers still outweigh the buyers.

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Fig EURUSD H4 chart

The candle right after the last one, following the bullish candles, showing that the buyers and the sellers has fight to get the upper hand, but no one won. As the chart shown, MA 50 was still hovering above the price line, indicating that the trend might still go down. ADX was under 25 level, showing that the trend was not so strong.

Analyses of Group Fiinvesting

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