Article by: ETO Markets
In Europe market, the EUR/USD pair struggled around the … mark as the US Dollar regained strength, bolstered by risk aversion stemming from political turmoil in France and South Korea. European markets displayed mixed performances, with the Hamburg Commercial Bank slightly revising November PMI data upward for the Eurozone, despite weaker figures from Germany. The EU’s Producer Price Index showed marginal monthly growth and a less negative annual figure than expected. Meanwhile, European Central Bank (ECB) President Christine Lagarde’s upcoming testimony before the Committee on Economic and Monetary Affairs in Brussels is anticipated to impact the Euro. In the United States, the Institute for Supply Management (ISM) Services PMI dropped to 52.1 in November, below expectations and down from October’s 56. Despise the weak statistics, Fed Chair Jerome Powell emphasized the Federal Reserve's independence, supported by both political parties, and highlighted the strong US economy with low unemployment and progress on inflation.
In Australia, slower-than-expected Q3 economic growth has reinforced expectations of a dovish stance from the Reserve Bank of Australia, with potential interest rate cuts anticipated by April 2025. The AUD/USD pair faced downward pressure near the … mark, driven by weak domestic data and a stronger US Dollar, with the DXY climbing to 106.60. Investors are also focused on upcoming US data releases to wait for strong direction indicators. Overall, markets globally grapple with varying pressures, from economic releases to political uncertainties.
EUR/USD fell below … during Wednesday's North American session but rebounded above the threshold on Thursday, as political uncertainty in France deepened with a no-confidence vote threatening Prime Minister Michel Barnier’s government. Concerns over the Eurozone’s economic outlook also weighed on the Euro, as ECB President Christine Lagarde highlighted weaker near-term growth while policymakers debated potential rate cuts ahead of the December 12 meeting. Meanwhile, the US Dollar displayed resilience despite weaker-than-expected ADP Employment data, which revealed that the US private sector added only 146K jobs in November. Besides, the Institute for Supply Management (ISM) Services PMI eased to 52.1 in November, below estimates and lower than October’s 56 reading. Fed officials have hinted at further rate cuts as inflation cools, with a 77% probability of a 25-basis-point reduction at the December 18 meeting, according to the CME FedWatch Tool, while geopolitical tensions escalated with President-elect Trump threatening 100% tariffs on BRICS nations.
From a technical perspective, EUR/USD may find a psychological support level at … and maintain a bearish outlook as all short-to-long-term EMAs slope downward, signalling a persistent downtrend. While the 14-day RSI near 40.00 indicates fading bearish momentum, the trend remains intact. Key support is at the November 22 low of …. On the flip side, the pair continues to trade within familiar levels, with the 20-day SMA acting as dynamic resistance around …. If the price breaks the two-week high around …, it may suggest a reversal of bearish outlook. To conclude, technical indicators remain negative, lacking clear directional strength, further skewing risks to the downside.
The AUD/USD pair fell over 1% to near …, driven by weaker-than-expected Australian GDP data for Q3, which showed a 0.8% annual expansion, below the 1% growth from the previous quarter and the 1.1% expected. On a quarterly basis, GDP grew by 0.3%, slightly missing the 0.4% forecast. This disappointing data increased expectations that the Reserve Bank of Australia may cut rates as early as April 2025. Additionally, a slight rise in the US Dollar, with the US Dollar Index reaching 106.60, also pressured the Aussie dollar. Meanwhile, the US Institute for Supply Management (ISM) Services PMI fell to 52.1, missing expectations and dropping from October’s 56. Fed Chair Jerome Powell reaffirmed the Federal Reserve's independence, which enjoys support from both political parties, and pointed to a robust US economy with low unemployment and progress on inflation
From a technical point of view, the AUD/USD pair faces persistent selling pressure, driven by both fundamental and technical factors, with indicators signaling continued bearish momentum. The Relative Strength Index (RSI) hovers near the oversold zone, reflecting extreme selling conditions. On the upside, the price could encounter resistance at the … level, supported by the two-week high, and further resistance at the 50-day Simple Moving Average of …. On the downside, the price is expected to find psychological support at the … level. If the price breaks the threshold, the support level would be at the August 8 low of ….
