By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
The major currency pair is rather unenthusiastic early in the week. The market managed to recover after the weak statistics published last week: investors’ interest in the USD as a “safe haven” asset went down, but they are still very cautious.
Macroeconomic reports from different European countries made the market move against the Euro.
First of all, the Manufacturing PMI in France decreased up to 49.7 points in December after being 50.8 points the month before. The French Services PMI went from 55.1 points in November to 49.6 points this month. The fact that the indicator broke the psychologically-crucial level of 50 points disturbed market players a lot.
The numbers from Germany didn’t make anybody happy as well. The Manufacturing PMI dropped to 51.5 points, the Services PMI – to 52.5 points.
Macroeconomic reports published by the USA last Friday showed that the Retail Sales added only 0.2% m/m in November after expanding by 1.1% m/m the month before. However, investors barely responded to this reading. Another report, the Capacity Utilization Rate, was 78.5% after being 78.1% in the previous month. And then was another reading, which completely switched attention to the USD: the Industrial Production in the USA increased by 0.6% m/m in November after losing 0.2% m/m in October and against the expected reading of +0.1% m/m.
The H4 chart shows that EURUSD has broken the support line of the previous correctional channel and right now is returning to the line to test it from below. The target of this pullback is at 1.1334. If the price breaks this level, it may return into the previous channel and grow towards the resistance line at 1.1412. However, according to the main scenario, the instrument is expected to continue trading downwards steadily. The downside targets are at 1.1230 and 1.1215.
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.