Forex Market: EUR/USD daily trading outlook

Yesterday’s trade saw EUR/USD within the range of 1.2500-1.2393. The pair closed at 1.2475, gaining 0.43% on a daily basis.

At 8:22 GMT today EUR/USD was up 0.07% for the day to trade at 1.2483. The pair held in a daily range of 1.2394-1.2499.

Fundamental view

Eurozone

Destatis reported that Germany’s Wholesale Price Index fell by 0.7% on an annual basis in October, following a 0.9% contraction in September.

In monthly terms, prices of goods sold by wholesalers surprisingly dropped 0.6%, defying analysts’ projections for a gain of 0.2% following September’s 0.1% increase. This index is considered as a leading indicator of consumer inflation.

Annualized industrial output in the Eurozone probably decreased for a second month at a pace of 0.2%, following up on a 1.9% contraction in August. Month-on-month, activity in the industrial sector likely grew 1%, reversing a 1.8% contraction in August.

The index, reflecting business cycle, measures the change in the overall inflation-adjusted value of output in sectors such as manufacturing, mining and utilities. In case industrial output expanded more than anticipated, this would support demand for the euro. Eurostat is to publish the official data at 10:00 GMT.

United States

The US Census Bureau is expected to report at 15:00 GMT that US wholesale inventories expanded by 0.4% on a monthly basis in September, following a 0.7% gain in August. If confirmed, this would be the 15th straight month of expansion.

This indicator represents the change in stockpiles of unsold goods held by wholesalers. Generally speaking, an inventory pileup signifies slowing sales and thus an economic slowdown, while a lower inventory level points to a more robust growth.

A separate report by the Mortgage Bankers Association is projected to show that mortgage applications fell by 0.2% last week, following a 2.6% decline during the preceding five-day period and a 6.6% drop in the week before. This indicator measure the change in the number of new applications for mortgages backed by the MBA during the respective week.

Pivot points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2456. In case EUR/USD manages to breach the first resistance level at 1.2519, it may continue up to test 1.2563. In case the second key resistance is broken, the pair may attempt to advance to 1.2626.

If EUR/USD manages to breach the first key support at 1.2412, it could continue to slide and test 1.2349. With this second key support broken, movement to the downside may extend to 1.2305.

The mid-pivot levels for today are as follows: M1 – 1.2327, M2 – 1.2381, M3 – 1.2434, M4 – 1.2488, M5 – 1.2541, M6 – 1.2595.

In weekly terms, the central pivot point is at 1.2463. The three key resistance levels are as follows: R1 – 1.2570, R2 – 1.2685, R3 – 1.2792. The three key support levels are: S1 – 1.2348, S2 – 1.2241, S3 – 1.2126.