The Euro has reached above the 1.23 price level only to find a lot of selling above that handle. At this point in time, the markets do not really know what to do with the idea of a new democratic government in the United States, so there has been a lot of volatility early in the session. Ultimately though, this should mean that the US dollar continues to struggle, and therefore it should be good for this pair.
In spite of the euro’s selloff from yesterday’s fresh 32-month peak at 1.2349 to 1.2267, successive strong rebound in late New York session on the Dollar’s weakness due to political turmoil in Washington suggests the pullback has ended and Medium Term bullish trend would resume after consolidation and above 1.2349 would extend marginally. Nevertheless, the 1.2370 price line resistance may limit upside due to loss of momentum and yield correction.
On the downside, only below 1.2267 would restore bearishness for stronger retracement to 1.2254, then 1.2242 but support at 1.2210 should hold.
Some Economic Data are expected to be released on Thursday including:
Australia building permits, trade balance, imports, exports.
Germany industrial orders, Swiss retail sales, UK Markit construction PMI, Italy CPI, CPI (EU norm), EU HICP, core HICP, retail sales, business climate, economic sentiment, industrial sentiment, services sentiment, consumer confidence.
U.S. trade balance, initial jobless claims, continued jobless claims, ISM non-manufacturing PMI, and Canada trade balance, exports, imports, Ivey PMI.
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