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Euro trades within November 30 range

The EURUSD pair dipped 0.16% to 1.1320 on Wednesday, December 1, hovering within a trading range of 1.1300-1.1360. Before the close of the North American session, the price retreated to 1.1311. The dollar drew support from a new string of US macro data.

The ISM Manufacturing PMI came in stronger than expected, while employment and new orders rose. The ADP private payrolls report for November bolstered expectations that official labor market data on Friday will exceed the median consensus.

Fed Chair Jerome Powell, testifying before Congress, reiterated that the US central bank is likely to speed up the tapering of its monthly bond purchases. Risk-sensitive assets (equities, oil, aussie, kiwi) logged losses on news about the first case of infection with the Omicron coronavirus strain stateside.

Today’s macro agenda (GMT+3)  

  • 3:00 Eurozone: PPI and unemployment rate (October)
  • 15:30 US: initial jobless claims (October 19-26)
  • 16:30 US: Atlanata Fed President Raphael Bostic speech
  • 17:00 US: Treasury Secretary Janet Yellen speech
  • 19:00 US: FOMC member Randal Quarles speech
  • 19:30 US: Richmond Fed President Thomas Barkin, Atlanta Fed President Raphael Bostic, San Fransicso Fed President Mary Daly speechers

Current outlook

Major currencies have been showing mixed performance. The market has been swinging between gains and losses due to Omicron-related uncertainty. The first case of the new variant in the US prompted the Biden administration to take new containment measures. Investors fear that any travel/trade restrictions could quickly reverse any progress made in supply chains.

UK Minister Boris Johnson said that the Omicron strain can be transmitted between vaccinated people. For this reason, England will also introduce Covid restrictions.

Today, the focus of attention, in addition to the virus, will be weekly unemployment claims and many Fed and ECB speakers. US nonfarm payrolls (NFPs) are due on Friday.

Technical analysis

By the time of writing, EURUSD was trading at 1.1322. The technical picture for the single currency looks favorable. Even if pressure on risk assets increases, the euro will draw support as a funding currency. Although market participants expect a strong NFP report, buyers have time to test their strength at the 1.1386 level. If buying remains sluggish on Thursday, we will have to wait for heightened volatility when NFPs come out at 13:30 GMT on Friday. Support is currently located at 1.1289 (45-degree angle of the Gann fan).

 

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