THE GREENBACK IS GAINING STRENGTH
The EUR/USD quotes are falling on the background of the greenback’s strengthening which is explained by the expected tightening of monetary policy in the US during this year. At the same time investors were fixing positions after the confident rally of the pair during the last few days. The bearish sentiment was not offset by positive macro statistics from the Eurozone, according to which the unemployment rate in November in the monetary union declined to 8.7%, the lowest level since 2009. At the same time, the German trade balance surplus in November was 22.3 billion versus the 20.7 billion expected and 19.9 billion in October. German industrial production in November also increased by 3.4% compared to the 1.9% forecasted. The main focus of investors during this week will be turned to the consumer inflation and retail sales data in the US, which will be released on Friday.
The AUD/USD price has changed direction amid the US dollar strengthening. The positive news on the increase of the number of building approvals in November in Australia by 11.7% against an anticipated decline of 0.9% has given some support for the bulls but, the positive trend has not been restored. Powerful moves of the pair are expected on Thursday night after the publication of the trade balance report in China which is the key trading partner of Australia.
The quotes of American crude oil benchmark WTI keep rising due to oil production cuts in OPEC and Russia on the one hand and the recent decline in the number of active drilling rigs in the US, which according to the latest report of oil service company Baker Hughes has fallen by 5 units to 742.
The EUR/USD has broken through the inclined support line and is currently testing the important 1.1925 level. The breaking of this level will be the basis for continued price drops with the nearest targets at 1.1825 and 1.1730. On the other hand, after the recent decline we may see the upward rebound with the growth potential to the SMA100 on the 15-minute chart and 1.2000.
On the AUD/USD price chart we have seen a breakthrough of the trend line and fixing below it may be the strong basis for further price declines to 0.7800 and below. The growth potential is limited by the local highs near 0.7865 and the resistance at 0.7900. After a number of unsuccessful attempts to reach 0.7900 the chance of decline has grown.
The WTI price is consolidating under the resistance at 62.20 and gaining a foothold above this level may become the trigger for the bulls to push the price higher with targets in the 64.00-65.00 range and above. On the opposite side, the basis for the trend change to negative may come from the price fixing under 61.00 and the inclined support line.