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Forex Market: EUR/USD daily trading forecast

Yesterday’s trade saw EUR/USD within the range of 1.2419-1.2506. The pair closed at 1.2469, gaining 0.15% on a daily basis.

At 8:00 GMT today EUR/USD was down 0.10% for the day to trade at 1.2455. The pair touched a daily low at 1.2450.

Fundamentals

Euro zone

Producer prices

The annualized index of producer prices (PPI) probably fell 1.3% in October, according to market expectations, after a 1.4% decline in September. If so, this would be the highest level since July, when annualized producer inflation was recorded at -1.3%. The Producer Price Index measures changes in prices of goods and services either as they leave the production process, or as they enter it. Unlike the CPI, which measures price changes from the consumers perspective, the PPI basically gauges the prices received by domestic producers for their output, or the prices paid by domestic producers for their intermediate inputs. The PPI performance may be an early signal for inflationary pressure in economy. Generally speaking, a higher-than-expected PPI reading should be considered as having a bullish effect on the common currency, as it suggests accelerated consumer inflation, while a lower-than-expected result would have a bearish effect.

United States

Construction spending

The amount of spending on all types of construction in the United States probably increased 0.5% in November compared to a month ago, following a 0.4% drop in October. Spending on residential construction, as a component of overall construction spending, has a predictive value for new home sales and mortgage origination volume. A faster-than-expected rate of increase in spending on construction projects may have a limited bullish effect on the US dollar. The Census Bureau is to release its report on spending at 15:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2465. In case EUR/USD manages to breach the first resistance level at 1.2510, it will probably continue up to test 1.2552. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2597.

If EUR/USD manages to breach the first key support at 1.2423, it will probably continue to slide and test 1.2378. With this second key support broken, the movement to the downside will probably continue to 1.2336.

The mid-Pivot levels for today are as follows: M1 – 1.2357, M2 – 1.2401, M3 – 1.2444, M4 – 1.2488, M5 – 1.2531, M6 – 1.2575.

In weekly terms, the central pivot point is at 1.2447. The three key resistance levels are as follows: R1 – 1.2538, R2 – 1.2623, R3 – 1.2714. The three key support levels are: S1 – 1.2362, S2 – 1.2271, S3 – 1.2186.

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