12.11.201813:15 Forex Analysis & Reviews: Fundamental Analysis of EUR/USD for November 12, 2018

EUR/USD has been quite impulsive amid the bearish bias recently. The price is holding below 1.1300 support area with a daily close. While EUR has been weighed down by political and economic issues, USD gained momentum on the back of upbeat economic data.

Recently EUR has been under pressure from Italy's budget deficit crisis which hurt the overall eurozone's economy badly.The eurozone is currently trying to recover it. Italy has been trying to assure the EU authorities that the budget deficit is not harmful to the economy as they Italy's government has created the draft for 2019, but the European Commission is still not convinced with the solutions offered by Italy. As long as this issue remains unsolved, the euro is losing favor with investors. Today Italian Industrial Production report was published with a decrease to -0.2% from the previous value of 1.7% which was expected to decrease more to -0.5%. Though the result was better than expected, it did not quite help the currency to sustain EUR momentum. Ahead of several macroeconomic reports and ECB President Draghi's speech on Friday, EUR is expected to trade with higher volatility.

On the other hand, USD has been propped up with positive economic results, including PPI and Unemployment Claims. As a result, USD asserted its strength versus EUR. Today there are no reports from the US in the economic calendar as the US trading floors are closed for the bank holiday, Veterans Day. Later this week, the US is due to present a series of macroeconomic reports which are expected to encourage further gains for the US currency. This week Fed Chair Powell is going to sideliver a speech which might also include some hints on upcoming interest rate decisions. Besides, Core CPI is expected to increase to 0.3% from the previous value of 0.1%. Retail Sales report is expected to increase to 0.6% from the previous value of 0.1%.

Meanwhile, USD is currently quite impulsive with the gains. USD is likely to extend a further rally in the coming days amid optimistic expectation of the upcoming economic reports this week. Though EUR is struggling to gain momentum, any negative report from the US this week may lead to corrections and increase in volatility.

Now let us look at the technical view. The price is currently quite impulsive amid the bearish pressure which did lead the price below 1.1300 area which is currently showing certain weakness in the process. Though the bias is still quite bearish, having certain economic events and reports yet to be published, while having Dynamic Level of 20 EMA residing quite away from the current price area, certain retracement may occur towards 1.1430-1.1500 area before the price continues with the bearish trend. On the other hand, if the price manages to remain below 1.1300 area with a strong bearish pressure, the price is expected to continue pushing lower without any deeper retracement above 1.1300 in the coming days. As the price remains below 1.1500 area, the price is expected to be bearish with a target towards 1.1150-1.1200 area in the coming days.

SUPPORT: 1.1150, 1.1200

RESISTANCE: 1.1300, 1.1430, 1.1500

BIAS: BEARISH

MOMENTUM: VOLATILE