Confidence Boost for Euro
Euro surges high in European session after German Ifo business confidence unexpectedly rose to 106.8 in November, matching a 15-year high. In particular, both current situation index and business expectation index continues to improve, indicating further continuation of economic upswing. EUR/USD reaches as high as 1.2974, pressing this year’s high of 1.2978. Also, Sep Eurozone current account deficit came in narrower than expected at 0.3B. UK business investment also increased more than expected by 3.1% qoq, 6.9%yoy.
Daily Pivots: (S1) 1.2869; (P) 1.2912; (R1) 1.2984; More
EUR/USD’s rise continues today to as high as 1.2974, pressing 1.2978 key resistance (this year’s high). At this point, intraday bias remains on the upside as long as EUR/USD stays above 1.2926 minor support. Touching of 1.2926 will suggest an intraday top is formed with some consolidations to follow before another rise.
In the bigger picture, current rise from 1.2483 might represent the start of resumption of medium term up trend from 1.1639. Breaking of near term falling trend line (from 1.2978 to 1.2937, now at 1.2885) is adding credence to such case. Decisive break of 1.2978 will be the confirmation that medium term up trend has resumed for next upside target of 78.6% retracement of 1.3668 (04 high) to 1.1639 (05 low) at 1.3234.
On the downside, below 1.2797 support will indicate a short term top is already formed and deeper correction might follow towards 1.2761 support or lower. However, further rally is still in favor as long as EUR/USD such correction is contained above 1.2641 resistance turned support.
Shing-Ip Tsui is the founder and CEO of
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