Key Highlights
- EUR/USD started following a bearish path from the 1.1200 resistance.
- GBP/USD failed to stay above the key 1.3200 support and declined towards 1.3000.
- The US GDP grew 2.1% in Q3 2019, similar to the market forecast.
- The US New Home Sales could decline 0.8% in Nov 2019 (MoM).
EUR/USD Technical Analysis
This past week, EUR/USD consolidated above the 1.1100 support and later extended its decline. The Euro failed to stay above a couple of key supports and it could continue to decline against the US Dollar.
Looking at the 4-hours chart, the pair traded below a major bullish trend line with support near 1.1130. More importantly, the pair traded below the 1.1100 and 1.1080 support levels.
Additionally, there was a break below the 50% Fib retracement level of the upward move from the 1.0981 low to 1.1199 high. The pair seems to approaching the 1.1050 support area.
If EUR/USD fails to stay above 1.1050, it might even trade below the 76.4% Fib retracement level of the upward move from the 1.0981 low to 1.1199 high. In the mentioned case, it could revisit the 1.1000 support area.
On the upside, the pair must gain strength above the 1.1100 resistance and a connecting bearish trend line to move back into a positive zone.
Fundamentally, the US Gross Domestic Product report for Q3 2019 was released by the US Bureau of Economic Analysis. The market was looking for the US GDP to grow by 2.1% in Q3 2019.
The actual result was in line with the market forecast, as the US GDP grew 2.1% in Q3 2019. Looking at the GDP Price Index, there was a 1.7% increase, similar to the last reading.
The report added:
THE AVERAGE OF REAL GDP AND REAL GDI, A SUPPLEMENTAL MEASURE OF U.S. ECONOMIC ACTIVITY THAT EQUALLY WEIGHTS GDP AND GDI, INCREASED 2.1 PERCENT IN THE THIRD QUARTER, COMPARED WITH AN INCREASE OF 1.4 PERCENT IN THE SECOND QUARTER.
Overall, EUR/USD could accelerate its decline if it breaks 1.1050. Moreover, GBP/USD seems to be under pressure and it may perhaps decline below 1.3000.
Upcoming Economic Releases
- US Durable Goods Orders for Nov 2019 – Forecast +1.9% versus +0.5% previous.
- US New Home Sales for Nov 2019 (MoM) – Forecast -0.8% versus -0.7% previous.
