Euro remains under pressure amid weak data in Germany
On Wednesday, November 24, trading in the euro ended in decline. The euro fell in price against the dollar by 0.44%, to 1.1198. Sales resumed after the publication of German statistics. IFO indices turned out to be worse than predicted values. Manufacturing supply problems and a surge in coronavirus infections have darkened Germany's growth prospects.
The IFO Business Climate Index declined to 96.5 in November from the previous 97.7 and 96.6 forecasts. The index of the assessment of the current situation decreased to 99.0 against the previous values of 100.1 and 99.0 according to forecasts. The IFO expectations index (for the next 6 months) fell to 94.2 in November against the previous values of 95.4 and 95.0 as forecasted.
After the publication of American statistics, the euro rate updated at least at 1.1186. The number of initial applications rose by 199 thousand in the week ending November 20, orders for durable goods in October fell by 0.5% m / m. GDP grew 2.1% qoq between July and September.
Germany has tightened measures to combat coronavirus. That also had a negative impact on the dynamics of the EUR / USD pair.
Scheduled statistics (GMT +3):
At 10:00 Germany will publish GDP for Q3.
At 11:10, ECB Representative Elderson will deliver a speech.
At 12:00, ECB Representative Schnabel will deliver a speech.
The report of the ECB meeting on monetary policy will be released at 15:30.
At 16:30, ECB President Lagarde will deliver a speech.
At 17:05, MPC member Haskell will deliver a speech.
Bank of England member Bailey will deliver a speech at 20:00.
In the USA - Thanksgiving Day.
Current situation:
Major currencies are trading in positive territory. The British (+ 0.19%) is among the growth leaders. There is a technical correction for all currencies. The British's strength is constrained by the uncertainty over Northern Ireland's fishing rights. The negotiations are at an impasse.
Today there are a lot of speakers, and in the USA it is a day off. The dollar index has corrected to 96.70 p. And may advance lower to 96.65. At the moment, the correction is sluggish, as market participants expect the continued strengthening of the US dollar ahead of the FOMC meeting in December.
Technical analysis:
The euro / dollar pair fell to the 112th degree (the Gann level from 1.1322). The pullback was 0.28% or 31 pips. A complex price pattern in the form of a truncated formation is formed on the hourly TF. Weak statistics and negative news on covid pushed the euro towards 1.12. The recovery rate is slow, therefore selling of the single currency may resume from the balance line of lb (1.1230).
In the formation with several lower bases, a correction to the level of 1.1320 is overdue. It is not known only what will trigger the closing of long positions in the dollar.
Summary: on Wednesday the euro closed lower on the back of negative data in Germany, imposition of restrictions in Germany, as well as positive data in the US on the labor market. A complex price pattern in the form of a truncated formation is formed on the hourly timeframe. If buyers do not pass the level of 1.1230-1.1240, they will be expected to retreat to 1.1165.