The Euro fell against the greenback on Monday, taking the price of EURUSD to less than 1.2430. The bearish wave that started in May, seems to prevail till the end of the year. Low inflation and ECB easing are causing the pair to drag lower.
As of this writing, the pair is being traded around 1.2452. The pair opened the Asian session around 1.2459 and is being dragged down by the sellers to 1.2427. However, the market did find some buyers around this level and the price could pull back to the 1.2450 level. On the upside, the immediate resistance lies around 1.1285, the 23.6% fib level. The said level restricted the pair on multiple occasions during November. Success in breaking this level will let the pair to move forward to test the resistance around 1.2600, the psychological number and confluence of trend line and 50-Day SMA as demonstrated in the following chart.
On the downside, the pair is targeting 1.2350. Success in breaking this support will let the pair to print fresh yearly low. As demonstrated in the chart above, the formation of daily triangle signals the pair may consolidate around 1.2360 before upward or downward move.
The overall bias is bearish because of lower highs on the daily chart. The bias will remain bearish as far as the resistance around 1.2887 remains intact.
ISM Manufacturing Index
The US manufacturing index remained at 58 points this November as compared to 59 points of the month before, says the average forecast of different economists. Released by the Institute of Supply Management, a high reading is indicator of growing economy. Thus a better than expected figure may further support the ongoing bearish momentum in the price of EUR/USD.
Markit Manufacturing PMI
The EUR marketing manufacturing PMI is expected by analysts to remain at 50.0, below than that of 51.4 points in the month before. Generally speaking a high reading is bullish for the Euro. Thus a better than expected figure may cause appreciation in the price of EUR/USD.
As per technical and fundamental outlook, buying or selling on a breakout through the triangle could be a good strategy in short to medium term.
* FXOpen International, best ECN broker of 2021, according to the IAFT