EURUSD Analysis 10.12.2018

The single currency of the European Union region rose during the Asian session, its highest since November 20,2018, against the US dollar on the eve of economic developments and data expected on Monday by the economies of the euro zone and the US economy, the world's largest economy.

At 05:37 GMT, the EUR/USD rose 0.47% to 1.1433, compared with the opening at 1.1379, after reaching a three-week high of 1.1443, while the session's low was at 1.1381.

The markets are now looking at Germany's largest economy to unveil the trade balance, which could reflect a contraction of the surplus to 17.2 billion euros from 17.6 billion euros in October, ahead of the Italian Industrial Production Index, the third largest economy in the euro zone, The decline widened to 0.4% versus 0.2% in October, to reveal the Sintex Consumer Sentiment Index for the region as a whole, which showed a contraction to 8.4 versus 8.8 in November.

On the other hand, investors are looking for the US economy to publish a statistical reading employment opportunities and job turnover, which may reflect a rise to 7.22 million versus 7.01 million in September, coming hours after the disclosure of labor market data for the last month which showed that showed stability rates unemployment at its lowest since 1969 at 3.7% for the third month in a row, consistent with expectations.

In the same context, the average hourly earnings report showed growth accelerated to 0.2% from 0.1% in October, below expectations of 0.3%, while the Non-Farm Employment Change Index showed a slowdown in job creation to 155,000 added jobs 237 thousand jobs added in October, worse than expectations for 198 thousand added jobs.

Technical analysis:

The EUR/USD starts the week higher to test now the pivotal resistance 1.1443. We note that SMA 50 continues to try to push the price lower while Stochastic is in overbought areas, which is a negative factor that could push the pair lower again.

On the other hand, when we look at the chart, we will notice that the price of the pattern of the head and shoulders upside down within the rectangle. It means that the price has a positive incentive to rush to rise in the short and long term, but needs to exceed the level of 1.1443 and eliminate the negative factors to confirm the current rise.

Therefore, we prefer to stop on the neutral temporarily until we get a clearer indication of the next direction, that we will get through breaking the resistance 1.1443 or break support 1.1400, as breaking this resistance will push the price to achieve positive targets start at 1.1550 and extends to 1.1705, while breaking Support will press the pair to head towards 1.1300 and then 1.1181 as the next major stations.

The trading range for today is expected among the 1.1320 and the 1.1530 support.

Support and resistance:

Support: 1.1341-1.1294-1.1211;

Resistance: 1.1382-1.1443-1.1500.

The expected general trend for today: depends on the levels mentioned in the report.