(MENAFN- Daily Forex) Bearish View
- Sell the EUR/USD and set a take-profit at 1.1100.
- Add a stop-loss at 1.1330 (pivot point).
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 1.1300 and a take-profit at 1.1400.
- Add a stop-loss at 1.1200.
The EUR/USD was little changed in the overnight session as investors reacted to the strong European business activity data. The pair also wavered after the latest decision by the US government to stabilize oil prices and lower inflation. It is trading at 1.1261, which is a few points above the lowest level this week.
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The EUR/USD has been in a major bearish trend in the past few weeks as investors price in a divergence between the Fed and the European Central Bank (ECB).
On Tuesday, data by Markit revealed that business activity in the two regions did well in November. In Europe, manufacturing, services, and composite PMIs rose to 58.2, 56.6, and 58.6, respectively. This happened even as the cost of doing business rose and supply chain disruptions remained.
In the United States, the Manufacturing PMI rose to 59.1 while the services and composite PMIs rose to 57 and 56.5, respectively. These numbers show that these sectors are doing well at a time when the number of Covid-19 infections has risen.
Today, the EUR/USD will react to a slew of data from Europe and the US. In Europe, the ifo Institute will publish the latest business sentiment numbers. The business climate is expected to drop to 96.6 while current assessment and business expectations are expected to fall to 99.0 and 95.0, respectively. This performance will be because of the rising number of Covid-19 cases.
The US will publish several important numbers that could have an impact on the EUR/USD pair. First, the country will publish the second estimate of GDP numbers. Being the second reading, its impact on the pair will be limited. The US will also publish initial jobless claims and durable goods orders.EUR/USD Forecast
The EUR/USD price has been in a major sell-off in the past few weeks. Indeed, it has fallen by almost 4% from its highest level this month. The pair has also moved between the standard pivot poin t and the first support. It is still below the 25-day and 50-day exponential moving averages.
Therefore, the pair will likely resume the downward trend in the coming days. If this happens, the next reference point to watch will be at 1.1100, which is the second support.
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