Technical Analysis

EUR/USD Price Analysis – Nov 29, 2023

By LonghornFX Technical Analysis
Nov 29, 20233 min

Daily Price Outlook

The EUR/USD currency pair extended its upward rally, marking the fifth consecutive session with a surge to around 1.1000 during the European session on Wednesday. However, the driving force behind this upward trend appears to be the weakened US Dollar, influenced by a less hawkish stance from the US Federal Reserve (Fed).

Meanwhile, traders appear hesitant to take strong positions as they closely monitor economic data from the European Central Bank (ECB) on Wednesday. Spain and Germany are expected to release preliminary Consumer Price Index (CPI) data for November, with both countries anticipated to report a slowdown in the annual inflation rate. Besides this, the European Commission is scheduled to release its Economic Sentiment Indicator.

Weakened US Dollar and Positive Economic Data Propel EUR/USD Pair Upward

The broad-based US dollar has been facing downward pressure around 102.60, desipite positive US economic data. It should be noted that the Housing Price Index for September beat expectations, showing a steady 0.6% increase, indicating a resilient and growing housing market.

Moreover, the US CB Consumer Confidence Index rose to 102.0 in November, up from the revised 99.1. However, the Greenback is impacted by falling US Treasury yields and comments from Fed Governor Christopher Waller, hinting at a flexible approach to interest rates if inflation decreases.

Therefore, the positive US economic data and the weakened US dollar contribute to an upward trend in the EUR/USD pair.

Market Focus: US Q3 GDP & Federal Reserve's Beige Book Release

Moving on, investors are turning their attention to the third-quarter preliminary Gross Domestic Product (GDP) Annualized figures in the US. Furthermore, the Federal Reserve is set to release the Beige Book later today, offering insights into the overall economic growth in the United States. These releases are likely to influence market sentiments and guide investment decisions.

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

EUR/USD - Technical Analysis

The EUR/USD pair is consolidating gains after its recent ascent, currently trading around the 1.10018 level. The currency is in a holding pattern, digesting its climb to levels not seen in 15 weeks, as it navigates the psychological 1.1000 threshold. The uptick is part of a broader risk-on sentiment in the market, which has pressured the US Dollar across the board.

The technical outlook for the pair remains constructive as it stabilizes above the 1.09642 mark, which is a key support level. On the upside, the immediate resistance is located at 1.10499, with further potential to test 1.11030 if the bullish momentum continues.

The Relative Strength Index (RSI) hovers around 66.03, suggesting that buying pressure remains, though the pair is not yet in the overbought territory. The RSI's current level indicates that the pair has room to extend gains before encountering overextended conditions.

Moreover, the 50-Day Exponential Moving Average (EMA) at 1.08553 acts as a dynamic support level, confirming the positive bias in the market. A sustained trade above this EMA will further bolster buyers' confidence.

In summary, the EUR/USD exhibits a bullish stance, with the potential to scale higher if it can maintain its foothold above immediate support levels. The pair's trajectory will likely be influenced by upcoming economic releases, including Eurozone consumer confidence and US GDP figures.

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