The single currency was trading 0.5% higher during the US session and the euro erased more than half of Monday’s losses as the EURUSD pair was hovering 20 pips below the 1.13 handle.
Earlier in the day, the German ZEW survey for November came out and the economic sentiment improved somewhat, when it printed -24.1 against expectations of -25.0 and the previous number remained at -24.7. However, the current situation crashed sharply from 70.1 to 58.2, probably due to the ongoing political crisis in Italy and a possible trade war between the EU and USA. The economic sentiment indicator for the whole euro zone fell to -22.0 from -19.4 in October. The euro continued to crawl higher, despite these miserable numbers.
The US calendar is empty today, again, and therefore there are no other news on the agenda today.
Investors will then pay attention to tomorrow’s EU GDP numbers for the third quarter and the year-on-year change is expected to stay unchanged at 1.7%, while the quarterly basis is forecast to remain at 0.2%. The economic momentum in the EU continues to decelerate, which might be negative for the euro.
Shortly after, the US CPI numbers will be released, with the headline CPI number seen climbing to 2.5% from 2.3% in October, whilst the core gauge is expected unchanged at 2.2%. Rising inflation might be positive for the US dollar.
The main resistance for the EURUSD pair is now at 1.13 and while below, rallies could be sold and the outlook seems bearish. Breaking above would cancel the immediate downward trend, with a potential relief rally to 1.14. On the downside, the next target for bears might be at Monday’s lows near 1.1220.
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