EURUSD Fundamental Analysis Ahead of US Data


EURUSD failed to close above the 200-day MA for the third day in a row on Monday. The markets are not impressed by the trade truce between the United States and China. Euro bulls require weak US data to force a convincing move above the key average. Here is the EURUSD Fundamental Analysis of 17 December, 2019. 

17 December, 2019 | AtoZ Markets – EURUSD is operating on higher grounds but is struggling to move the 200-day moving average, a barometer of long-term trends. The pair closed well above 1.1116 on December 11, confirming bullish higher lows and higher highs setup. Since then, however, the single currency has failed to close above the 200-day MA. For example, the euro resumed a strong bid on Friday and climbed to 1.12 to end the day with moderate losses at 1.1118.

EURUSD Fundamental Analysis – 17 December 2019

The pair managed to make gains of 0.23% on Monday, despite the gloomy German and Eurozone manufacturing PMI. But it again failed to close above the long-term average. As of press time, EURUSD is trading at 1.1147, after rejected at the 200-day MA at 1.1152 in the Asian session.

A close above the key average is necessary to support the uptrend. And it will likely attract stronger buying pressure, possibly yielding a rise above Friday’s high of 1.12. The markets are not impressed by the phase-one US-China trade deal.

Many, including Kathy Lien of BK Asset Management, believe that phase one of the trade agreement is more of a trade truce than a trade agreement. After all, contentious issues such as intellectual property theft and forced transfer of technology remain unresolved.

As a result, the euro bullish will likely need weak US data to force a convincing break above the 200-day MA. The monthly US Housing Starts and Building Permits scheduled for Tuesday at 13:30 GMT. Moreover, the Eurozone Trade Balance (Oct), scheduled for 10:00 GMT, is unlikely to move the markets.

Read More: 17 December Free GBP/USD, EUR/USD, BTC/USD and ETH/USD Trading Signals

US China Trade

The agreement announced Friday after more than two and a half years of volatile negotiations between Washington and Beijing. It will reduce certain American tariffs on Chinese products in exchange for an increase in Chinese purchases of certain American products. Masaru Ishibashi, deputy managing director of trading at Sumitomo Mitsui Bank, said:

“There is some scepticism, but overall the deal is likely to boost business sentiment. Even we don’t expect dynamic market movements in the coming weeks due to the holiday season year. Likely, risk assets will gradually increase. Some emerging market currencies are already starting to price that in.”

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