The EUR/USD appears to be advancing in a strong short-term uptrend
Jason Lubin December 24, 2020 10:00 AM
If price retreats look to the 20-day simple moving average for support.
The US Dollar was bearish against all of its major pairs on Wednesday. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications rose 0.8% for the week ending December 18th, compared to +1.1% in the week before. Durable Goods Orders increased 0.9% on month in the November preliminary reading (+0.6% expected), compared to a revised +1.8% in the October final reading. Initial Jobless Claims dropped to 803K for the week ending December 19th (880K expected), from a revised 892K in prior week. Continuing Claims unexpectedly fell to 5,337K for the week ending December 12th (5,560K expected), from a revised 5,507K in the previous week. Personal Income slipped 1.1% on month in November (-0.3% expected), compared to a revised -0.6% in October. Personal Spending declined 0.4% on month in November (-0.2% expected), compared to a revised +0.3% in October. The University of Michigan's Consumer Sentiment Index fell to 80.7 on month in the December final reading (81.1 expected), from 81.4 in the December preliminary reading. Finally, New Homes Sales tumbled to 841K on month in November (995K expected), from a revised 945K in October.
On Thursday, no major economic data is expected.
The Euro was bearish against most of its major pairs with the exception of the JPY and USD. In Europe, import prices in Germany rose 0.5% in November, compared with +0.3% expected and the previous month.
The Australian dollar was bullish against most of its major pairs with the exception of the NZD and GBP.
From a chartist's point of view, on a daily chart, the EUR/USD currency pair has been rising in a strong short-term uptrend since price broke out above 1.1925 in late-November. The simple moving averages (SMAs) are positioned in a bullish manner, with the 20-day SMA above the 50-day SMA. The pair will likely continue to advance towards the 1.2290 and 1.2415 resistance levels. If price pulls back speculators should look for support around the 20-day SMA. If the pair falls below the 20-day SMA, it would be a call for caution and traders should look to 1.2070 for a rebound. If price fails to be supported at 1.2070 it would be a bearish signal that could send the EUR/USD back down to 1.1925.
Source: GAIN Capital, TradingView
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.