Yahoo Finance EUR/USD Daily Technical Analysis for November 24, 2017
The EUR/USD was buoyed by stronger yields as it is clear following the ECB minutes there is a split over QE. Stronger than expected PMI data out of France and Germany lifted the Eurozone PMI results. Solid German Q3 GDP helped the Euro test resistance levels, despite a holiday in the U.S. that kept that market closed.
Technicals
The EUR/USD moved higher testing trend line resistance following stronger than expected data including the robust French and German PMI numbers. Support is seen near the 10-day moving average at 1.1760. Momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
ECB Minutes Confirm Split in Council over QE
ECB minutes confirm split at council over keeping QE open ended and not committing to a firm end date for net asset purchases. Comments from individual council members had already pretty much indicated that and Draghi never said that the decision was unanimous, indeed, it seems that while top officials wanted to keep the insurance policy in place, comments since the meeting already indicate that in the central scenario there won’t be another program beyond September next year. Until then the forward guidance is going to gradually shift away from a focus on net asset purchases on rates and the commitment to keep reinvested assets that become due.
Eurozone November PMIs Were Higher
Eurozone November PMIs jump higher, with readings coming in much stronger than anticipated. The services reading jumped to 56.2 from 55.0 and the manufacturing PMI to 60.0 from 58.5, leaving the composite at 57.5, up from 56.0 in October. Markit reported that the economy is showing signs of picking up momentum in the fourth quarter “with multi-year highs seen for all main indicators of output”. At the same time, goods exports increased at a survey record pace and the overall build-up in backlogs of work was the largest since July 2006.
German, French November PMIs much stronger than expected.
The German manufacturing PMI jumped to 62.5 in November, from 60.6 in the previous month, the French improved to 57.5 from 56.1. Services readings also improved, and the French outpaced the German number with a reading of 60.2, up from 57.3 in October, while the German reading nudged only marginally higher to 54.9 from 54.7. Very strong leads for the overall Eurozone reading, and further arguments for those pushing for QE to end in September next year.
French Business Confidence Improved in November
French business confidence improved to 111 in November from 109 in the previous month, with the manufacturing reading rising to 112 from 111. The overall production outlook indicator nudged higher to 31 from 30, falling somewhat short of expectations, with Bloomberg consensus looking for a stronger improvement over the month. The reading for foreign order books decline, but overall order books improved and the own company price outlook jumped to 12 from 3 in the previous month, which seems to back other reports suggesting underlying price pressures are starting to build up.
German Q3 GDP Was Strong
German Q3 GDP was confirmed at 0.8% quarter over quarter, in line with the preliminary number and up from 0.6% quarter over quarter in the previous quarter. The annual rate rose to 2.8% year over year and the breakdown, which was released for the first time, confirmed that net exports were a driving factor. Private consumption contracted over the summer, government consumption was flat and while investment improved, the expansion was notably weaker than in the previous quarter as construction investment contracted.
The EC’s Juncker said that Brexit talks not far enough to move into Phase 2. The European Commission President seemed to dash hopes that EU heads of states will clear the way for transition and trade talks to proceed alongside negotiations of the details of the U.K.’s exit from the EU in December, when he said that Brexit talks are still not far enough to move into Phase 2, although he added that the EU is in intensive discussions with the U.K.
This article was originally posted on FX Empire
