EURUSD 2017-12-01 Intra-day analysis

Daily Forex Market Preview, 01/12/2017

The optimism in the markets that President Trump’s tax reforms will be passed saw the markets trading higher. The U.S. dollar was trading mixed but the greenback managed to post gains against the weaker currencies such as the yen and the kiwi dollar.

OPEC managed to seal the deal as the oil producing nations agreed to extend the production cuts through the end of 2018. This sent oil prices higher with Nymex crude oil futures rising 0.2% while Brent oil futures rose 0.7% on the day.

In the Eurozone, the common currency fell as the flash inflation estimates showed that core inflation remained weak at 0.9%. This was despite the headline inflation coming out higher. However, the common currency quickly pared losses on hopes of positive coalition talks between the SPD and the CSU.

Looking ahead, the economic data today will see the monthly ISM manufacturing PMI data. Estimates show that manufacturing activity fell to 58.4 from 58.7 previously. Canadian monthly GDP report and unemployment data is expected as well.

EURUSD (1.1909): The EURUSD was volatile yesterday as price action initially slipped to a 6-day low before recovering. The declines came as the flash inflation estimates came out lower than forecasts for the Eurozone. The EURUSD formed an inside bar on the daily session which could now see a potential breakout from the ranging price action. On the 4-hour chart, price action briefly tested the resistance level at 1.1920 as expected. We expect to see the euro maintaining a sideways range within 1.1920 resistance and 1.1822 support region in the short term. A breakout from this range will potentially establish further direction in the currency pair. The risk is however to the downside as the common currency could fall towards the lower support at 1.1710 on a downside breakout.