Back above parity, but facing a major technical hurdle By Investing.com


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Investing.com – The rose for another day yesterday, which allowed it to get back above parity, marking for the moment a high at 1.0034.

Remember that yesterday was marked by a continuation of the optimism observed at the end of last week. After having opened lower, the European indices finally closed higher or at equilibrium yesterday, after the day of very strong rise last Friday.

This positive climate reduced demand for the greenback, a safe haven, which mechanically benefited the Euro Dollar.

Positive European statistics also helped the Euro to strengthen, with in particular a good surprise on the side of German industrial production for the month of September yesterday morning, with an increase of 0.6% against +0.2% expected.

The Sentix index of European investor confidence was also a positive surprise, standing at -30.9 for the month of November, up sharply from -38.3 the previous month, and against -35 expected by economists.

The EUR/USD pair also welcomed hawkish comments from ECB President Christine Lagarde, who repeated that inflation is far too high, stressing that interest rates will have to be raised further, which cements expectations. another rate hike for the next central bank meeting.

Turning to Tuesday’s economic calendar, EUR/USD traders will mostly be watching the Euro Zone retail sales at 11am, as well as several speeches from ECB members. Tomorrow’s day will also be quite poor in statistics.

On the other hand, Thursday will be the occasion for the publication of the US CPI for the month of October, a figure that will be decisive for expectations for the next Fed meeting.

>> Find all the potentially influential events on EUR/USD today in our economic calendar.

Will the EUR/USD manage to stay above parity?

From a chart perspective, EUR/USD’s return above parity is a very encouraging signal, but the pair is facing key hurdles that threaten to send it back lower.

Indeed, as seen on the daily chart below, the Euro Dollar remains below the 100-day moving average, which halted the pair’s previous rally on October 26-27.

Euro Dollar (EUR/USD) - D1

Currently at 1.0041, this 100-day MA should be considered as a very important immediate obstacle. Then, the October 27 peak near 1.01 and the threshold of 1.02 will be the next bullish targets.

On the downside, few supports can be spotted before the 0.99 threshold in the event of the EUR/USD returning below parity.

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