(MENAFN- Daily Forex) Bearish View
Sell the EUR/USD pair and set a take-profit at 1.0780. Add a stop-loss at 1.0950. Timeline: 1-2 days.
Bullish View
Set a buy-stop at 1.0870 and a take-profit at 1.0950. Add a stop-loss at 1.0780.
The EUR/USD pair bounced back after the European Union published a strong
GDP report, and after the head of Bundesbank cautioned on rate cuts. It has risen for three consecutive days, reaching a high of 1.0865, its highest level since Oct. 21 UK GDP Numbers
The EUR/USD pair rallied after a report by Eurostat showed that the economy did better than expected in the third quarter.
The GDP expanded by 0.4% on a QoQ basis, an improvement from the previous 0.2% . This growth translated to a year-on-year growth rate of 0.9%.
However, there are still signs that the bloc is going through challenges. For example, the German economy contracted by 0.2% during the quarter. Also, Volkswagen, the country's biggest employer, has unveiled plans to close three factories and lay off thousands of people.
The EUR/USD pair also rose after a hawkish statement by Joachim Nagel, a member of the European Central Bank, who cautioned against more rate cuts as some analysts expect.
Instead, he expects the bank to maintain its data-dependence in its upcoming meetings. The bank has already delivered three cuts, and analysts expect it to deliver another one in its meeting in December.
His statement mirrored that of Isabel Schnabel, a board member who urged for more caution in the next meetings.
The EUR/USD pair rose after the US GDP data missed analysts estimates. According to the Bureau of Economic Analysis (BEA), the economy expanded by 2.8% in the third quarter, missing the analysts estimate of 3.0%. This growth was mostly because of strong consumer spending.
Looking ahead, the US will release the closely-watched personal consumption expenditure (PCE) data on Thursday, followed by the nonfarm payroll (NFP) numbers on Friday/USD Technical Analysis
The EUR/USD pair bounced back after dropping to the important support level at 1.0780 on Monday. This was a notable level since it coincided with the ascending trendline that connects the lowest swings since October 3.
EURUSD Chart by TradingView
The two lines of the MACD indicator are about to form a bullish crossover, while the Relative Strength Index (RSI) has pointed upwards.
On the negative side, the 50-day and 100-day moving averages are about to form a bearish crossover. Therefore, the pair will likely rise and retest the resistance at 1.0900 and then resume the downward trend. More losses will be confirmed if the pair drops below the support at 1.0780.
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