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Yesterday’s trade saw EUR/USD within the range of 1.2441-1.2546. The pair closed at 1.2537, gaining 0.70% on a daily basis.

At 7:37 GMT today EUR/USD was down 0.10% for the day to trade at 1.2520. The pair touched a daily low at 1.2512 at 3:05 GMT.

Fundamentals

Euro zone

Euro zone Current account

The surplus on Euro zones current account probably shrank to 9.4 billion EUR in September from 15.1 billion EUR in August. Regions seasonally adjusted current account had a surplus of 18.9 billion EUR in August.

The current account reflects the difference between savings and investments in the Euro area. It is the sum of the balance of trade, net current transfers (cash transfers) and net income from abroad (earnings from investments made abroad plus money sent by individuals working abroad to their families back home, minus payments made to foreign investors).

A current account surplus indicates that the net foreign assets of the region have increased by the respective amount, while a deficit suggests the opposite. A nation with a surplus on its current account is considered as a net lender to the rest of the world, while a current account deficit puts it in the position of a net borrower. A net lender is consuming less than it is producing, which means it is saving and those savings are being invested abroad, or foreign assets are created. A net borrower is consuming more than it is producing, which means that other countries are lending it their savings, or foreign liabilities are created. A contracting surplus or an expanding deficit on the areas current account usually has a bearish effect on the euro.

The European Central Bank is expected to release the official data at 9:00 GMT.

Euro zone Construction output

At 10:00 GMT Eurostat is to report on construction activity in the Euro zone for September. Seasonally adjusted construction output in the region increased 1.5% in August compared to a month ago. In annual terms, output shrank 0.3% in August. This indicator reflects how resilient construction sector development is and also provides clues over investment activity. Higher rates of increase in output usually provide a limited support to the common currency.

United States

Building permits and Housing starts

The number of housing starts in the United States probably increased to 1.025 million in October from the seasonally adjusted annual rate of 1.017 million during the prior month. If so, this would be the highest number of housing starts since July, when 1.117 million sites were reported. Single-family housing starts in September were at a rate of 646 000, or 1.1% above the revised figure of 639 000 in August. The September rate for units in buildings with five units or more was 353 000, according to data by the US Census Bureau.

Housing Starts represent a gauge to measure residential units, on which construction has already begun, every month. A start in construction is defined as the foundation laying of a building and it encompasses residential housing primarily.

The number of building permits in the country probably rose to 1.040 million in October from an unrevised annual level of 1.018 million in September. If so, this would be the highest number of permits since July, when 1.052 million units were reported. Single-family authorizations in September were at a rate of 624 000, or 0.5% below the revised number of 627 000 in August. Authorizations of units in buildings with five units or more were at a rate of 369 000 in September, according to the report by the Census Bureau.

Building permits are permits, issued in order to allow excavation. An increase in the number of building permits and housing starts usually occurs a few months after mortgage rates in the country have been reduced. Permits are not required in all regions of the United States. Building permits, as an indicator, provide information regarding demand in US housing market. In case a higher-than-anticipated number is reported, this will certainly support the greenback. The official housing data is due out at 13:30 GMT.

FOMC minutes

At 19:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on October 28th-29th. The minutes offer detailed insights on FOMC’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. High volatility is usually present after the publication.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2508. In case EUR/USD manages to breach the first resistance level at 1.2575, it will probably continue up to test 1.2613. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2680.

If EUR/USD manages to breach the first key support at 1.2470, it will probably continue to slide and test 1.2403. With this second key support broken, the movement to the downside will probably continue to 1.2365.

The mid-Pivot levels for today are as follows: M1 – 1.2384, M2 – 1.2437, M3 – 1.2489, M4 – 1.2542, M5 – 1.2594, M6 – 1.2647.

In weekly terms, the central pivot point is at 1.2489. The three key resistance levels are as follows: R1 – 1.2584, R2 – 1.2645, R3 – 1.2740. The three key support levels are: S1 – 1.2428, S2 – 1.2333, S3 – 1.2272.

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