The euro had a volatile end to November against the US dollar. EURUSD opened Friday’s trading at 1.1000 and dropped to an intraday low of 1.0980. Then, sometime during the New York session, EURUSD rallied to a high of 1.1027 before closing at 1.1019.
However, looking at the currency pair’s performance for the month of November, the euro lost over 130 pips to the dollar. EURUSD began November at 1.1150.
Given the lack of top-tier economic reports from both the US and euro zone, it may be safe to say that the move on Friday was mostly driven by profit taking. Today could be different as we have two important forex news due for EURUSD.
ECB President Lagarde Speech Scheduled Today
At 2:00 pm GMT, ECB President Christine Lagarde is scheduled to make a speech. This is going to be her second one as the head of euro zone’s central bank. In her first speech, the euro weakened against most of its counterparts as she called for governments to implement fiscal policies that align with the ECB’s monetary policy. If she hints that the central bank is open to easing even further in the future, we could see the euro slide again in today’s trading.
ISM Manufacturing PMI Eyed to Print at 49.2
Across the Atlantic at 3:00 pm GMT, the ISM manufacturing report for November is due. The report is eyed to print at 49.2. This follows after October’s 48.3 reading which suggests that while business conditions remain in contraction (because the forecast is below the 50.0 baseline reading), they are improving.
European PMIs Due Today
Other second-tier data are also due for release today. At 8:15 am GMT, the Spanish manufacturing PMI for November is expected to print at 46.5. Meanwhile, at 8:45 am GMT, the Italian manufacturing PMI is seen at 47.5. At 8:50 am GMT, the French final manufacturing PMI is eyed at 51.6. Then at 8:55 am GMT, the German final manufacturing PMI is seen at 43.8. Lastly, at 9:00 am GMT, euro zone’s final manufacturing PMI is seen at 46.6.
On the 4-hour chart, we can see that EURUSD has been holding on to support at the 1.1000 psychological handle. It has also been making lower highs since November 1. The currency pair looks like it has formed a descending triangle which is typically interpreted as a bearish indicator in forex trading.
Worse-than-expected euro zone data, a dovish ECB speech, or positive US data could push EURUSD lower. It may soon re-test November lows around 1.0990.
On the other hand, better-than-expected euro zone data, a hawkish ECB speech or negative US data could spark a rally to the falling trend line. The currency pair may test resistance at 1.1050.Download our latest quarterly market outlookfor our longer-term trade ideas.
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