Euro bulls made an effort to drive the EUR/USD pair closer to the significant resistance level at 1.1800 and are maintaining their gains as Wednesday’s session begins. The onset of the annual holiday season is upon us, characterized by diminished market liquidity and the inclination of investors to establish positions for the upcoming year, aiming to mitigate any unforeseen developments when full activity resumes in global financial markets. Overall, as noted earlier, sustaining price action above the significant 1.1800 level is essential for bulls to progress toward higher highs and establish dominance.
Based on the analysis of technical indicators on the daily chart and various reliable trading platforms, a breakout above the 1.18 resistance level would drive the 14-day Relative Strength Index closer to the overbought threshold of 70. Unless the euro gains new positive momentum, EUR/USD could encounter selling pressure from profit-taking. Meanwhile, the MACD indicator persists in indicating a robust bullish trend. Conversely, within the same timeframe, the psychological support at 1.1500 stands out as the critical level for a possible resurgence of bearish dominance. Currently, EUR/USD traders are not anticipating significant economic data from the Eurozone; the primary attention will be directed towards the release of US weekly jobless claims at 15:30.
Market participants suggest holding off until EUR/USD establishes stability above the 1.1800 peak to validate potential upward movement. Consideration may be given to limited, low-risk short positions, while remaining aware that the economic calendar still features significant releases for the rest of the trading week. In the context of forex market trading, the euro presently exhibits an ambiguous trajectory, despite a somewhat positive momentum that requires further validation, given that the muted economic data from the Eurozone has not delivered robust backing. On another note, diminished liquidity during the holiday period has constrained trading activity, maintaining the euro within a limited range. The single European currency has been shaped by prevailing market sentiment, with a moderately positive risk appetite impacting demand for the euro, which is typically viewed as a defensive currency. In the United States, the economic calendar indicates that durable goods orders for October fell short of the anticipated -1.5%, registering a decrease of -2.2%. Durable goods orders, when excluding transportation, experienced a decline of 0.3%, reflecting a reduction of 0.2%.
The preliminary annualized US GDP for the third quarter surpassed expectations, registering at 4.3% compared to forecasts of 3.3%. The preliminary GDP price index for the quarter exceeded expectations of 2.7%, increasing by 3.7%. In the same context, US industrial production for November increased by 0.2%, surpassing monthly expectations of 0.1%. This represented a significant enhancement relative to the -0.1% noted in October, which had also underperformed against the anticipated 0.1%. Capacity utilization experienced a modest increase in November, rising to 76% from 75.9%, surpassing forecasts. Preliminary personal consumption expenditure (PCE) prices for the third quarter increased to 2.8%, a rise from 2.1%, aligning with expectations. Core PCE for the quarter showed an improvement to 2.9%, rising from 2.6%, aligning with expectations.