Yesterday’s trade saw EUR/USD within the range of 1.0948-1.0995. The pair closed at 1.0975, going up 0.10% on a daily basis, while extending the gain from Thursday. The daily high has been the highest level since December 16th, when the cross registered a high of 1.1007.
At 7:21 GMT today EUR/USD was losing 0.12% for the day to trade at 1.0962. The pair touched a daily low at 1.0960 at 7:17 GMT, overshooting the range support level (S3). Short-term support may be received at the hourly 55-period EMA and then – at the low from December 28th (1.0948). Resistance may be encountered at the high from December 28th (1.0995) and then – at the high from December 16th (1.1007).
Today EUR/USD trading may be influenced by the macroeconomic reports listed below.
Fundamentals
Euro area
Italy – Consumer Confidence, Business Confidence
Confidence among consumers in Italy probably was lower in December from a month ago, with the respective index coming in at a reading of 117.0, according to market expectations. In November confidence improved sharply, as the gauge went up as high as 118.4 from an upwardly revised level of 117.0 in October (116.9 previously). Novembers level of confidence has been the highest since the new index was introduced in 1995, as respondents in the survey felt more optimistic about personal, current and future economic conditions.
The index of consumer confidence is based on a survey, conducted by phone and encompassing about 2 000 households in the country. Respondents give their opinion regarding past and future economic situation in Italy, past and future personal financial situation, unemployment, intention to make major purchases such as durable goods, and saving prospects. Readings of 100.0 indicate neutrality (no change in sentiment). Values above 100.0 signify improving confidence, while values below 100.0 are indicative of low expectations. Lower-than-expected index readings might have a moderate bearish impact on the common currency. The official reading is due out at 9:00 GMT.
Meanwhile, confidence among manufacturing companies in Italy probably lowered for a second consecutive month in December, with the corresponding index sliding to a level of 104.2. In November the gauge was reported at 104.6.
The Manufacturing Confidence Survey features 4 000 Italian companies. Respondents give their opinion regarding the current trend of order books, production and inventories, short-term forecasts on order books, production, prices and the general economic situation.
The index of business confidence is seasonally adjusted and has a base year of 2005. Readings of 100.0 signify neutrality in business sentiment. Values exceeding 100.0 imply improving confidence, while values below 100.0 are related with low expectations. In general, lower-than-anticipated index values may have a moderate bearish effect on the common currency and vice versa. The official reading by the Istat is due out at 9:00 GMT.
United States
Consumer Confidence Index by the CB
Confidence among consumers in the United States probably improved in December, with the corresponding index coming in at a reading of 92.9, according to market expectations, from 90.4 in November. The latter has been the lowest index value since September 2014, when the gauge was reported at 89.0.
This indicator measures the level of individuals confidence in the US economic development. It is considered as a leading indicator, as it gives an early insight into consumer spending, which accounts for most of the nations GDP.
In case the index advanced more than anticipated, this would have a strong bullish effect on the US dollar, as higher confidence suggests a greater willingness to spend and, respectively, an accelerated economic growth. The Conference Board research group is to publish the official index reading at 15:00 GMT.
Bond Yield Spread
The yield on German 2-year government bonds went as high as -0.328% on December 28th, or the highest level since December 17th (-0.326%), after which it closed at -0.333% to add 0.001 percentage point in comparison with December 24th. It has been the 7th gain in the past 20 trading days.
The yield on US 2-year government bonds climbed as high as 1.059% on December 28th, or the highest level since April 2010, after which it closed at the exact same level to add 5.3 basis points (0.053 percentage point) compared to December 24th. It has been the 21st gain in the past 30 trading days and also a fourth consecutive one.
The spread between 2-year US and 2-year German bond yields, which reflects the flow of funds in a short term, expanded to 1.392% on December 28th from 1.340% on December 24th. The December 28th yield spread has been the largest one in at least 8 months.
Meanwhile, the yield on German 10-year government bonds soared as high as 0.638% on December 28th, or the highest level since December 23rd (0.642%), after which it slid to 0.564% at the close to lose 6.1 basis points (0.061 percentage point) compared to December 24th. It has been the 10th drop in the past 20 trading days and also a second consecutive one.
The yield on US 10-year government bonds climbed as high as 2.289% on December 28th, or the highest level since December 16th (2.332%), after which it slipped to 2.232% at the close to lose 1.3 basis points (0.013 percentage point) compared to December 24th. It has been the 19th drop in the past 30 trading days and also a second consecutive one.
The spread between 10-year US and 10-year German bond yields widened to 1.668% on December 28th from 1.620% on December 24th. The December 28th yield difference has been the largest one since December 2nd, when the spread was 1.710%.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for EUR/USD are presented as follows:
R1 – 1.0979
R2 – 1.0984
R3 (range resistance) – 1.0989
R4 (range breakout) – 1.1001
S1 – 1.0971
S2 – 1.0966
S3 (range support) – 1.0961
S4 (range breakout) – 1.0949
By using the traditional method of calculation, the weekly pivot levels for EUR/USD are presented as follows:
Central Pivot Point – 1.0937
R1 – 1.1028
R2 – 1.1079
R3 – 1.1170
S1 – 1.0886
S2 – 1.0795
S3 – 1.0744
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
