Forex Market: EUR/USD daily trading forecast

Friday’s trade saw EUR/USD within the range of 1.2220-1.2302. The pair closed at 1.2226, losing 0.49% on a daily basis.

At 8:13 GMT today EUR/USD was up 0.30% for the day to trade at 1.2258. The pair touched a daily high at 1.2268.

Fundamentals

Euro zone

Consumer Confidence

Confidence among consumers in the Euro area probably improved in December. The preliminary value of the consumer confidence index probably rose to -11.0. If so, this would be the highest level of confidence since August, when the indicator stood at -10.0. The final index for November came in at -11.6, confirming the preliminary estimate. The indicator measures consumer confidence on a scale of -100 to +100. A reading of -100 suggests a lack of confidence, zero means neutrality and a reading of +100 indicates extreme levels of confidence. The index reflects the level of optimism, which consumers have about economic development in the region. The Business and Consumer Survey is conducted by phone and includes 23 000 households in the Euro zone. The questions asked stress on current economic and financial situation, savings intention and also on expected developments regarding consumer price indexes, general economic situation and major purchases of durable goods. This indicator is one of the five major components, that comprise the Economic Sentiment Indicator (ESI).

Higher confidence usually implies greater willingness to spend, including large-ticket purchases, while consumer spending is a key factor behind economic growth. Therefore, in case the gauge increased more than anticipated, this would cause a bullish impact on the euro. The European Commission is expected to release the official reading at 15:00 GMT.

United States

Existing Home Sales

The index of existing home sales in the United States probably gained 0.8% to a level of 5.25 million in November compared to a month ago. In October compared to September existing home sales rose 1.5% to 5.26 million, or the highest level since September 2013. The sample of data encompasses condos, co-ops and single-family houses.

Statistical data on existing home sales is often used along with statistical figures regarding the new home sales and pending home sales, with the major objective being to draw a conclusion how nation’s housing sector is performing, regardless of interest rates. The most active house-purchasing period in the United States is usually between the months of March through June. Therefore, in case statistical data revealed a sudden drop in the number of homes sold rather than an improvement during this period, this would be considered as a signal of weakness in the country’s housing market.

The report on existing home sales usually does not cause a real direct impact on US economy. Actually, this effect appears to be minimal, due to the fact that nothing is produced with the mere sale of an existing home. In terms of economic activity, the sale of an existing house may be related only to interior design and purchases of new furniture.

The reason markets pay a certain attention to existing home sales report is that it reveals much about the general course of nation’s economy. A major part of the population considers a house as a sign of wealth and, unlike the money wealth, which is concentrated in certain regions of the country and held by the wealthiest representatives of the population, ”housing wealth” is evenly distributed across the country.

In case the index increased more than anticipated, this would have a bullish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 15:00 GMT on Monday.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2249. In case EUR/USD manages to breach the first resistance level at 1.2279, it will probably continue up to test 1.2331. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2361.

If EUR/USD manages to breach the first key support at 1.2197, it will probably continue to slide and test 1.2167. With this second key support broken, the movement to the downside will probably continue to 1.2115.

The mid-Pivot levels for today are as follows: M1 – 1.2141, M2 – 1.2182, M3 – 1.2223, M4 – 1.2264, M5 – 1.2305, M6 – 1.2346.

In weekly terms, the central pivot point is at 1.2338. The three key resistance levels are as follows: R1 – 1.2457, R2 – 1.2687, R3 – 1.2806. The three key support levels are: S1 – 1.2108, S2 – 1.1989, S3 – 1.1759.