The EUR/USD pair saw slight gains during European trading on Tuesday, hovering just below 1.1550 and settling at 1.1530. Despite the release of Germany’s GDP data, there wasn’t much of a boost for the euro (EUR). Meanwhile, the U.S. dollar index (DXY) dropped during most of the morning sessions, with investors looking out for delayed U.S. retail sales and producer price index (PPI) figures due later in the day.
New data revealed a 0.3% contraction in Germany’s GDP for the second quarter, aligning with early forecasts that suggested there would be little economic movement in the third quarter.
On Monday, Federal Reserve Board member Christopher Waller supported last week’s comments from New York Fed President John Williams, pushing for a quarter-point rate cut in the upcoming month. Waller noted that current data indicates inflation might slow down, although there are signs of a weakening labor market.
These remarks have stirred up market expectations for further monetary easing in December, although investors remain cautious, considering the divisions among policymakers might lead to a tight decision-making process.
In another development, U.S. President Donald Trump shared on social media that his rapport with China is “very strong” following a conversation with Chinese President Xi Jinping. Soon after, he also contacted Japanese Prime Minister Sanae Takaichi, aiming to mitigate geopolitical tensions between their countries.
Throughout the day, speakers from the European Central Bank (ECB) are scheduled to appear, but attention is mostly directed at the U.S., where the September PPI, retail sales, and November consumer confidence data will be released.
Today’s Euro Price
Below is a table showing the percentage changes of the Euro (EUR) against major currencies today, with the euro showing the strongest performance against the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | Australian Dollar | New Zealand Dollar | Swiss Franc | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.06% | -0.20% | 0.08% | 0.30% | 0.33% | 0.23% | |
| EUR | 0.05% | -0.00% | -0.16% | 0.13% | 0.34% | 0.38% | 0.27% | |
| GBP | 0.06% | 0.00% | -0.14% | 0.17% | 0.35% | 0.38% | 0.28% | |
| JPY | 0.20% | 0.16% | 0.14% | 0.29% | 0.50% | 0.52% | 0.43% | |
| CAD | -0.08% | -0.13% | -0.17% | -0.29% | 0.22% | 0.23% | 0.14% | |
| Australian Dollar | -0.30% | -0.34% | -0.35% | -0.50% | -0.22% | 0.04% | -0.07% | |
| New Zealand Dollar | -0.33% | -0.38% | -0.38% | -0.52% | -0.23% | -0.04% | -0.10% | |
| Swiss Franc | -0.23% | -0.27% | -0.28% | -0.43% | -0.14% | 0.07% | 0.10% |
This map illustrates the percentage change among major currencies, with the base currency from the left column and the quote currency from the top row. For instance, selecting EUR from the left and USD across shows the percentage change as EUR (Base)/USD (Quote).
The Euro Remains Range-bound as Fed Speculations Rise
- The common currency is consolidating around the 1.1500 mark, as eurozone economic data hasn’t inspired confidence among investors, who are now waiting for U.S. macroeconomic figures that can offer more clarity on the Fed’s monetary policy direction.
- On Tuesday, German statistics indicated that GDP remained flat in the third quarter, following a 0.3% decline in the previous quarter, revealing the continued weakness in the region’s primary economies. Year-on-year growth in the German economy ticked up to 0.3%, compared to 0.2% from the second quarter.
- The German IFO business confidence index slipped to 88.1 in November from 88.4 in October, which wasn’t what market watchers anticipated, as they expected a slight improvement to about 88.5. Meanwhile, the index tracking the current economic situation nudged up from 85.3 to 85.6, but future economic expectations saw a decline from 91.6 in October to 90.6 in November.
- The U.S. dollar index has recently shifted towards lower trading ranges, primarily due to dovish remarks from Fed officials and burgeoning expectations around a rate cut next month. The chances of a 25 basis point rate cut on December 10 have surged to over 80%, up from roughly 40% just last week, as per CME Group’s FedWatch tool data.
- Meanwhile, U.S. PPI for September is anticipated to rise to 0.3% from a previous 0.1% decline in August. Annual inflation is projected to slightly increase to 2.7% from last month’s 2.6%. However, core PPI is expected to see a slight decline at an annual rate of 2.7%, down from 2.8% in August.
- At the same time, retail sales in the U.S. are expected to see a rise of 0.4% in September, which is a slowdown from August’s 0.6% growth. Sales are expected to climb 0.4%, excluding automobiles, down from 0.7% growth in the previous month.
Technical Analysis: EUR/USD Remains Under 1.1550 Resistance
The EUR/USD pair continues to hover near a two-week low around 1.1500, with any upward movements facing limits below 1.1550, though the overall bearish trend seems intact. The four-hour relative strength index (RSI) on Monday failed to hold above the 50 mark. The Moving Average Convergence Divergence (MACD) showed an uptick above the signal line, yet it remains below the zero line, pointing at the fragile recovery from Friday’s lows.
The resistance levels at 1.1550 have posed a challenge for bulls over the past three trading sessions, positioning the pair in a sort of limbo above 1.1500. For a bullish response to materialize, we’d need to break through that level, targeting the highs of a descending channel formed from November 18th and 19th, approximately at 1.1600, along with mid-October highs around 1.1625.
Conversely, if the pair dips below the psychological barrier of 1.1500, it could encourage bears to retest the November 5 low close to 1.1470 and the lower edge of the descending channel that currently trails near 1.1425.
