The Euro (EUR) inched lower against the US Dollar (USD) on Monday, dragging the price of EURUSD to less than 1.0900 following the release of some major economic data from the Eurozone. The technical bias remains bearish because of a Lower Low in the ongoing downside move.
As of this writing, the pair is being traded near 1.0885. A support can be noted around 1.0823, the horizontal support area ahead of 1.0800, the psychological number and then 1.0777, another major horizontal support area as demonstrated in the given below daily chart.
On the upside, the pair is expected to face a hurdle near 1.0900-1.0912, the confluence of psychological number as well as horizontal resistance ahead of 1.1039, the high of last week and then 1.1110, another major horizontal resistance area. The technical bias will remain bearish as long as the 1.1366 resistance area is intact.
The eurozone economy showed renewed signs of life at the start of the fourth quarter, enjoying its strongest expansion so far this year with the promise of more to come. With backlogs of work accumulating at the fastest rate for over five years, business activity growth and hiring look set to accelerate further as we head towards the end of the year. October’s PMI is consistent with a quarterly GDP growth rate of 0.4pc, led by a 0.5pc pace of expansion in Germany. Modest growth of 0.2-0.3pc is being signalled for France, but there are various indicators which suggest that France will enjoy stronger growth in coming months, including a marked build-up of uncompleted work.
Considering the overall technical and fundamental outlook, selling the pair on short term rallies appears to be a good in near term.