After declining 0.4% across the previous week, EUR/USD is holding steady in early trade on Monday. Optimism over a US – China trade deal has had a limited effect on the currency pair which has barely moved at the start of the holiday shortened week.
The dollar moved higher at the end of last week following encouraging data. GDP grew at 2.1% yoy in Q3 as forecast – personal consumption was notably strong. PCE inflation beat expectations as did US consumer confidence.
An absence of relevant EZ data means US dollar dynamic will act as key driver of movement for EUR/USD.
US durable goods orders could produce opportunities later today. Solid growth of 1.5% is forecast during the month. Core durable goods are expected to record just 0.1% growth. The Fed are currently neutral in their stance. For the Fed funds to shift higher, stronger growth in the US economy is needed. Durable goods is an important indicator.
Levels To Watch:
EUR/USD remains capped on the upside by $1.11. The pair trades below the 50 & 100 sma and is supported by 200 sma around $1.1066. A break above $1.11 could revive the uptrend bringing $1.12 into target. A break through $1.1060 could open the door to $1.1040.
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