Yesterday (29/12), EUR/USD turned down again after rising in privious 2 days, as the US economic data was positive. This pair traded between $1.08979 and $ 1.09905, before closing at $1.09178, down 0.43% compared with the opening price of $1.09648.
After three days of Christmas and weekend, the trading session was fully bleak on Monday, while Australia, New Zealand, England and Canada continued closing for holiday. The European exchanges deserted as well as no published data, which led the pair fluctuated in a narrow range and small volume.
Yesterday, the European market was active again although some investors have closed transaction before Christmas. This trading week shortened and weaken illiquidity, which made the market fluctuated strongly even if buying/selling power was small.
Yesterday, Conference Board, the research organization located in New York, announced Consumer Confidence Index rose to 96.5 points in December compared with 92.6 points in November. This is the most positive in recently three months and exceeded the previous forecast at 93.9 points. The index is based on a survey of 5,000 households about the present and future economic assessment, including the number of jobs, the business situation and the general economic situation. The household spending is the backbone of the US economy, contributing to 2/3 country’s GDP. The confidence of consumers increased, which showed positive attitude to the US economy, so Americans consumes more than before. Thus the dollar was supported to gain yesterday, dragging the pair down.
While the impact of monetary policy tightening of Federal Reserve (Fed) after meeting lasted two days 16-17 /12 (GMT + 7) has gone. Now, the investors concentrate the road Fed raised interest rates in 2016. In the draft medium-term, Federal Open Market Committee (FOMC) is expected to tighten 4 times in 2016, to push rates at 1.4% in the end of 2016 and 2.5% in lately 2017. However, according to federal funds market, Fed may raise rates in the two meetings in June and December.
Fed Chairman, Mrs. Janet Yellen said the Fed will not act mechanically, road depends on economic data to determine the timing and amplitude. Meanwhile, the published US economic data last week has yet showed any strong signal on route which US central bank will raise interest rates next year.
Today, Pending Home Sales is center of attention in the market. Sales is expected to rise 0.6% in November, the highest growth since July. However, the housing market had quite negative signal before, as both available home sales and new home sales fell sharply. Today figures are forecast not to ecceed expected and causing pressure on dollar.
Currently, at 16:32 GMT + 7, EUR / USD is trading at $1.09409, up 0.21% compared with the opening price of $ 1.09174.
Observe the chart H1 we can see the pair fluctuated sharply yesterday, opened over clearance 23.6 then constantly fixed and fell sharply in early US session, broke the consecutive two block 23.6 at $1.09464 and 38.2 at $1.09188. Price hit resistance 50.0 at $1.09860 but can not break through this resistance.
Today, in Asia and early European session, prices rose slightly. In the first candle, price has broken through block 23.6 and passing on this block in the Asian morning session. In the afternoon session, prices moved sideways clearer and is going to resistance 23.6 at $ 1.09464.
Tools MUAEA Signal Trend showed sell signal in early US session yesterday, currently earn about us 28 points.
After the Christmas holiday and before New Year’s eve, many investors have quickly closed transactions, made the market illiquid due to small volume. So price fluctuated sharly when buying or selling power emerges. Psychology waiting data will make the early sesion quite bleak. The market is predicted to volatile strongly in the US session.
Things the traders focus today is the pending home sales index of the US. This index is indicator about health economy, measuring the activities of the real estate market.
Observe the H1 chart, the bullish candlestick overwhelmed the bearish, which suggests buying momentum was overwhelming sold momentum. Four of the recently six candles have short body and long upper shadow, which indicates buying power prevails but unstable, selling power is not strong enough to cause the pair turned.
If the housing data is more positive than expected and the Consumer Confident Index (CCI) was very positive yesterday, investors may believe that Federal Open Market Committee (FOMC) raise interest rates in the near future, push dollar up.
Besides, according to the report weekly 14-18/12, US oil output fell 5.9 million barrels, and the economists predicted the output continue to decline 1.8 million barrels last week. Reductions in oil output will decline global oversupply, supporting oil prices and US inflation.
The Persional Comsumpion Expenditure Index (PCE) was only 1.25%, still far from target at 2%. Higher oil prices will support commodity prices, make inflation closer to the target. The prospects of dollar rose after tightening will push the greenback up, which may drag the pair back below resistance 23.6.
Today, EUR / USD may turn up as the investor closed transactions. The price is predicted to rise to $ 1.10000.
However, as analyzed in the Risks, prices could fall to $ 1.08700 if the data from the US market is positive.
Analysis of Group If24h