Bullish view
- Buy the EUR/USD and set a take-profit at 1.0700.
- Add a stop-loss at 1.0500.
- Timeline: 1-3 days.
Bearish view
- Set a sell-stop at 1.0550 and a take-profit at 1.0450.
- Add a stop-loss at 1.0650.
The EUR/USD price was little unchanged on Thursday after the US published strong consumer confidence data. It was trading at 1.0600, where it has been in the past few days. Focus now shifts to the final estimate of US GDP data.
US consumer confidence and GDP data
The EUR/USD price was little changed after the relatively mixed economic data from the United States. Data published on Tuesday revealed that housing starts and building permits continued plunging in November as interest rates continued rising. Housing starts dropped by a whopping 11.2% during the month.
On Wednesday, additional data showed that existing home sales dropped by 7.7% in November after falling by 5.9% in the previous month. They dropped from 4.43 million to 4.09 million, which was worse than the median estimate of 4.20 million. These numbers show that higher interest rates are having an impact on the housing sector.
On the other hand, data published by Conference Board showed that consumer confidence continued rising in December as inflation continued falling. The index rose sharply to 108.3 in December from the previous 101.4. Consumers’ view of the economy jumped as sentiment about the present state of the economy improved.
Consumer confidence is one of the most important numbers in the market because consumer spending is the biggest part of the economy. The impact of the data to the EUR/USD pair was mild because it came a week after the Fed delivered its interest rate decision.
The next data to watch will be the final reading of Q3 GDP data. Economists expect the data to show that the economy expanded by 2.9% in the third quarter after contracting in the previous two quarters. Still, like consumer confidence, the data will not have a major on the pair.
EUR/USD forecast
The EUR/USD pair has been moving sideways in the past few days. As it dropped, the pair is consolidating at the 25-day moving average while the Relative Strength Index (RSI) moved slightly below the neutral point. The pair is approaching the lower side of the ascending channel pattern. It has also moved at the standard pivot point.
Therefore, the pair will likely remain in this range on Thursday. With it forming a small falling wedge pattern, the next breakout will be bullish, with the next key level to watch will be at 1.0766.
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