Euro Gives Up Earlier Gains, Resuming the Downtrend versus the Dollar
Euro has pared its earlier gains versus the dollar on Tuesday as positive data from the U.S. sustained the greenback’s rally which was powered by the spending plan of President-elect Donald Trump.
The pair EURUSD was trading near its lowest level since early January at 1.07150 after a batch of economic reports supported the case for the Federal Reserve to raise its rates next month.
As stated by the Census Bureau, sales at U.S. retailers soared in October after a revised 1% advance in the previous month. The rally marked the best two-month stretch since early 2014, indicating that low interest rates and improvements in the labor market are encouraging Americans to borrow and spend. Retail sales jumped 0.8% last month, topping economists’ forecast by 0.1%. The result was boosted by strong sales from auto dealers, whose sales hit an 11-month high.
Another report which is about New York-area manufacturing conditions swung to positive reading in November for the first time in the last four months. The Empire Fed index rose 8.3 points to 1.5 with new-orders index adding 8.7 points to 3.1 and shipments index rising 9.1 points to 8.5.
Adding to supports for the dollar rally, Boston Fed President Eric Rosengren on Tuesday said that speculations of an interest-rate hike this December are “plausible” given rising inflation and a job market near full employment.
A number of Federal Reserve officials will speak this week, and Chairwoman Janet Yellen’s testimony on Capitol Hill on Thursday will be closely watched.
Fig: EURUSD D1 Technical Chart
EURUSD is struggling around the support at 1.07150 after falling off from the 61.8% Fibonacci retracement and another major support at 1.08000. As can be seen from indicator windows, the market has penetrated the oversold zone, which led to earlier correction today. In the event of continual down moves, the pair may reverse higher at 1.06300.
Sell Stop at 1.07100, Take profit at 1.06300, Stop loss at 1.07500