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EUR/USD: bull-bear tug-of-war continues

  • EUR/USD remains trapped in a symmetrical triangle, despite the downward revision of the Eurozone growth and inflation forecasts by the ECB.
  • Narrowing yield differentials and easing Italy concerns favor a bull breakout.
  • The EUR may challenge triangle support today if the Eurozone PMI's miss estimates and the US retail sales blow past expectations.

The EUR bulls and the bears are fighting it out in a month-long narrowing price range.

The European Central Bank (ECB) dialed back its QE program yesterday but also downgraded the Eurozone inflation and growth forecasts. So, the first rate hike could be pushed out to 2020.

The bears are still struggling to score a victory over the bulls, possibly due to dovish Fed expectations and easing Italy budget concerns, as represented by the falling Italy-German yield spreads.

The prospects of a triangle breakdown, however, would improve if the preliminary German and Eurozone PMI numbers, scheduled for release today, print below estimates, validating ECB's view that the balance of risk is moving to the downside.

Not to forget, the dollar will likely pick up a strong bid if the US November retail sales better estimates, lifting the treasury yields higher.

It is worth noting that a triangle breakdown if confirmed, would open the doors for a break below the recent low of 1.1215. On the other hand, a triangle breakout could be seen if the US retail sales unexpectedly contract, boosting expectations of a Fed rate pause in 2019.

EUR/USD Technical Levels   

EUR/USD

Overview:
    Today Last Price: 1.1362
    Today Daily change: -2.0 pips
    Today Daily change %: -0.0176%
    Today Daily Open: 1.1364
Trends:
    Previous Daily SMA20: 1.1365
    Previous Daily SMA50: 1.1403
    Previous Daily SMA100: 1.1501
    Previous Daily SMA200: 1.1723
Levels:
    Previous Daily High: 1.1394
    Previous Daily Low: 1.1331
    Previous Weekly High: 1.1424
    Previous Weekly Low: 1.1311
    Previous Monthly High: 1.15
    Previous Monthly Low: 1.1216
    Previous Daily Fibonacci 38.2%: 1.1355
    Previous Daily Fibonacci 61.8%: 1.137
    Previous Daily Pivot Point S1: 1.1332
    Previous Daily Pivot Point S2: 1.13
    Previous Daily Pivot Point S3: 1.127
    Previous Daily Pivot Point R1: 1.1395
    Previous Daily Pivot Point R2: 1.1426
    Previous Daily Pivot Point R3: 1.1457

                                           

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