Most likely, the main currency pairs will spend today in ranges, without a clear direction. Both buyers of the dollar and its sellers need new drivers, and there will be none today, both against the background of the absence of important macro statistics publications in today’s economic calendar, and due to the short trading day in the US.
Such drivers will appear only next week. On Wednesday, the ADP report on the level of employment in the private sector of the American economy for November and an updated estimate of annual US GDP for the 3rd quarter will be published, on Thursday – business activity indexes (PMI) in the US manufacturing sector, and on Friday – the monthly report of the US Department of Labor with data for November, around which the main movement in the financial markets will take place (for more details, see the Most Important Economic Events of the Week 11/28/2022 – 12/04/2022).
As we noted in our Fundamental Analysis today, a breakdown of the key resistance level 1.0385 and a breakdown of the higher long-term resistance level 1.0500 significantly increases the risks of breaking the EUR/USD long-term bearish trend.
But so far, EUR/USD does not have such a powerful potential. Given the fact that Fed officials will continue to tighten the US central bank’s monetary policy, albeit at a slower pace, most economists are inclined to believe that the 105.00 level on the DXY dollar index chart will hold, and the dollar will soon resume its growth. In addition to the Fed’s tough policy, this will be facilitated by the relatively better state of the American economy than in other major economies of the world, in particular the European one.
The most probable scenario than a “going north” seems to us to be a breakdown of support at the level 1.0385 and a resumption of EUR/USD decline.
Support levels: 1.0385 1.0325 1.0300 1.0245 1.0116 1.0085 1.0000 0.9745 0.9700 0.9600 0.9535 0.9500 0.9400 0.9300 0.9200 0.9200
Resistance levels: 1.0400, 1.0500