EUR/USD: Euro-zone’s consumer confidence index declined to a 20-month low level in November


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR rose 0.18% against the USD and closed at 1.1389.

Data indicated that the Euro-zone’s final consumer confidence index declined to a 20-month low level of -3.9 in November, at par with market expectations and confirming the preliminary figures. In the prior month, the index had registered a reading of -2.7. Moreover, the nation’s economic sentiment indicator declined to a level of 109.5 in November, falling for the 11th-consecutive month and compared to a revised reading of 109.7 in the preceding month.

On the other hand, the region’s business climate indicator surprisingly rose to a level of 1.09 in November, compared to a reading of 1.01 in the previous month.

Separately, in Germany, seasonally adjusted unemployment rate unexpectedly fell to a rate of 5.0% in November, notching its record lowest level and defying market expectations for an unchanged reading. In the previous month, unemployment rate had recorded a reading of 5.1%. Meanwhile, the nation’s flash consumer price index (CPI) climbed 2.3% on an annual basis in November, less than market consesnsus for an advance of 2.4%. In the previous month, the CPI had registered a gain of 2.5%.

In the US, data revealed that the US personal income rose 0.5% on a monthly basis in October, more than market expectations for an advance of 0.4%. Personal income had climbed 0.2% in the previous month. Moreover, personal spending advanced 0.6% on a monthly basis in October, surpassing market expectations for a rise of 0.4%. Personal spending had recorded a revised rise of 0.2% in the preceding month. On the other hand, the US pending home sales eased 4.6% on a yearly basis in October, marking its lowest level in 4 years and more than market consensus for a drop of 2.8%. In the previous month, pending home sales had registered a revised fall of 3.3%. Additionally, the nation’s seasonally adjusted initial jobless claims unexpectedly rose to a 6-month high level of 234.0K in the week ended 24 November 2018, compared to a reading of 224.0K in the prior week. Market participants had envisaged initial jobless claims to ease to a level of 220.0K.

The Federal Open Market Committee (FOMC) November meeting minutes indicated that an interest rate hike is likely at next month’s meeting. Almost all officials expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon. However, a few participants expressed uncertainty regarding the timing of future rate hikes.

In the Asian session, at GMT0400, the pair is trading at 1.1394, with the EUR trading marginally higher against the USD from yesterday’s close.

The pair is expected to find support at 1.1361, and a fall through could take it to the next support level of 1.1329. The pair is expected to find its first resistance at 1.1414, and a rise through could take it to the next resistance level of 1.1435.

Moving ahead, traders would await the Euro-zone’s unemployment rate for October and consumer price index for November along with Germany’s retail sales for October, set to release in a few hours. Later in the day, the US Chicago purchasing managers’ index for November will keep traders on their toes.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

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