Technical Analysis

EUR/USD Price Analysis – Nov 24, 2023

By LonghornFX Technical Analysis
Nov 24, 20234 min

Daily Price Outlook

During the early European trading session on Friday, the EUR/USD pair maintained its upward rally and remained well bids around above 1.0900. However, the reason for its upward trend can be attributed to the release of Eurozone PMI data that exceeded market expectations.

Investor focus is now shifting to the release of Germany's Gross Domestic Product for the third quarter (Q3) and the upcoming US PMI data, both scheduled for Friday. Hence, the outcomes of these economic indicators are poised to significantly influence market dynamics.

On the flip side, the US market remained closed on Thursday, with no economic data released. During this period, the US dollar experienced a decline as market participants increased their bets that the Federal Reserve had ended its hiking cycle, and there were expectations of a rate cut in the middle of 2024. Consequently, the bearish trend in the US dollar was seen as another key factor contributing to the pair's upward movement.

Eurozone's Strong PMI Data Sparks Positive Momentum, Boosts EUR/USD Pair

According to the latest information on Thursday, the Eurozone's November PMI data surpassed expectations. Meanwhile, the overall Composite Purchasing Managers' Index (PMI) increased to 47.1, surpassing the estimated 46.9 and showing improvement from the previous 46.5. The Manufacturing PMI reached a six-month high at 43.8, up from 43.1, while the Services PMI expanded to 48.2, compared to the previous 47.8. Hence, this positive data provided a boost to the Euro against the US dollar.

In Germany, the Business Climate Index, a crucial economic indicator, showed improvement in November, reaching 87.3. Although this slightly missed the anticipated 87.5, it still marked an improvement from October's figure of 86.9. This suggests a more positive business outlook in Germany. Collectively, these reports indicate a noticeable upturn in momentum for the Eurozone economy.

Therefore, the positive Eurozone PMI data, signaling economic improvement, boosted the Euro against the US dollar. This was reinforced by Germany's improved Business Climate Index, supporting positive momentum for the EUR/USD pair.

US Market Pause and Dollar Dip Amid Fed Speculation; Eyes on Upcoming PMI Data

Furthermore, the US market took a breather on Thursday, with no economic data released as it was a holiday. During this period, the US dollar witnessed a decline in value, fueled by market speculation that the Federal Reserve (Fed) could have ended its interest rate hikes and might consider rate cuts in mid-2024.

Looking ahead, the upcoming US PMI data will give us a look into how well the US economy is doing. People will be paying close attention to these numbers because they tell us how different parts of the US economy are doing. This information can also affect the value of the US dollar in the global market.

 EUR/USD Price Chart – Source: Tradingview
 EUR/USD Price Chart – Source: Tradingview

EUR/USD - Technical Analysis

As of November 24, the EUR/USD pair presents a somewhat restrained movement, recording a marginal decline of 0.08% to 1.0898. This slight downward shift places the currency pair just below the pivotal level of 1.0995. Looking ahead, the pair faces immediate resistance at 1.1080, with subsequent barriers at 1.1244 and 1.1418. On the downside, support is evident at 1.0833, followed by lower levels at 1.0742 and 1.0580.

The Relative Strength Index (RSI) for EUR/USD stands at 49, indicating a neutral to slightly bearish market sentiment. However, the Moving Average Convergence Divergence (MACD) presents a more complex picture with a value of -0.47 and a signal line at 0.57, suggesting potential for downward momentum. Yet, the EUR/USD pair is hovering around its 50-Day Exponential Moving Average (EMA) of 1.0904, which marginally supports a bullish trend.

Chart analysis shows the EUR/USD pair holding above the 1.0888 support level, with the 50 EMA providing a backbone for a potential buying trend. This technical setup points to a cautiously optimistic outlook for the pair.

In conclusion, the overall trend for EUR/USD appears to be cautiously bullish, particularly if the pair maintains above the $1.0888 mark. In the short term, the currency pair is expected to test the immediate resistance at 1.1080. However, traders should remain vigilant to the mixed signals from the MACD and RSI indicators, which might influence the pair's ability to breach these resistance levels effectively.

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