Yesterday showed how good old fashioned support and resistance levels should always be closely watched as EURUSD bounced off the 1.2360 level for the second time of the month. EURUSD remains a well sold currency pair (even over half of FxPro’s client positions are short according to our dashboard, at the time of writing) and is susceptible to squeezes higher so when you get a piece of data like Germany’s better than expected Ifo business climate and last week’s ZEW, you can see the Euro receive a bit of a bid. This morning we’ve already seen German GDP released in line at 1.2%, so no hocks to the downside, but doesn’t seem quite enough to challenge the longer term downtrend for EURUSD which still looks very much in place unless we see a concerted move back above the 1.2600 level.
From the US today we see GDP data and consumer confidence which are just two of many data releases packed in ahead of North America’s shortened week as they shut up shop on Thursday and Friday for Thanksgiving. We’ve seen the GDP data before in the first reading which is due to be revised a little lower, so the focus is likely to be more on the consumer confidence, expected to rise to a seven year high to 96.0, up from 94.5. This has the potential to give USD yet another leg higher, in particular against the low yielders like JPY, EUR and SEK.