Yesterday’s trade saw EUR/USD within the range of 1.0652-1.0764. The pair closed at 1.0726, rising 0.63% on a daily basis, while extending gains from Wednesday. The daily high has been the highest level since November 16th, when the cross registered a high of 1.0780.
At 7:21 GMT today EUR/USD was losing 0.24% for the day to trade at 1.0707. The pair touched a daily low at 1.0701 at 7:14 GMT, which undershot the range support level (S3). The pair has been holding below the weekly central pivot level for a fifth consecutive trading day.
Today EUR/USD trading may be influenced by the events and macroeconomic reports listed below.
Fundamentals
Euro area
ECB Draghis statement
At 8:00 GMT European Central Bank President Mario Draghi is expected to take a statement. High volatility of the currency pairs containing the euro is usually present during such events.
Consumer Confidence – preliminary estimate
Confidence among consumers in the Euro area probably improved in November. The preliminary value of the consumer confidence index probably advanced to -7.5 from a final value of -7.7 in October. The latter was a confirmation of the preliminary index reading reported on October 22nd. The index 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 area. 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 among the key factors driving economic growth. Therefore, in case the consumer confidence index advanced more than anticipated, this would cause a moderate bullish impact on the euro. The European Commission is expected to release the preliminary reading at 15:00 GMT.
Bond Yield Spread
The yield on German 2-year government bonds went as high as -0.353% on November 19th, or the highest level since November 13th (-0.347%), after which it closed at -0.367% to lose 0.004 percentage point in comparison with November 18th. It has been the sixth drop in the past nine trading days.
The yield on US 2-year government bonds climbed as high as 0.904% on November 19th, after which it closed at the exact same level to add 2.4 basis points (0.024 percentage point) compared to November 18th. It has been the fourth consecutive trading day of gains.
The spread between 2-year US and 2-year German bond yields, which reflects the flow of funds in a short term, widened for a fourth straight day on November 19th to reach 1.271% from 1.243% on November 18th. The November 19th yield spread has been the largest one in more than six months.
Meanwhile, the yield on German 10-year government bonds soared as high as 0.511% on November 19th, after which it slid to 0.483% at the close to lose 2.5 basis points (0.025 percentage point) compared to November 18th. It has been the ninth consecutive trading day of decline.
The yield on US 10-year government bonds climbed as high as 2.276% on November 19th, after which it slipped to 2.255% at the close to lose 1.8 basis points (0.018 percentage point) compared to November 18th. It has been the sixth drop in the past nine trading days.
The spread between 10-year US and 10-year German bond yields widened for a fifth straight day on November 19th to reach 1.772% from 1.765% on November 18th. The November 19th yield difference has been the highest one in more than six months.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for EUR/USD are presented as follows:
R1 – 1.0736
R2 – 1.0747
R3 (range resistance) – 1.0757
R4 (range breakout) – 1.0788
S1 – 1.0716
S2 – 1.0705
S3 (range support) – 1.0695
S4 (range breakout) – 1.0664
By using the traditional method of calculation, the weekly pivot levels for EUR/USD are presented as follows:
Central Pivot Point – 1.0761
R1 – 1.0849
R2 – 1.0919
R3 – 1.1007
S1 – 1.0691
S2 – 1.0603
S3 – 1.0533
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