EUR/USD Dec. 9 – Recovering to resistance as Greece

EUR/USD is trading well above 1.23, extending the recovery that began yesterday after reaching very low levels. Greece has received an extension regarding its bailout but brought forward presidential elections. In the US, the Fed favorite JOLTS number is awaited.

Here’s a quick update on technicals, fundamentals and sentiment moving the pair.

• Asian session: The pair continued its recovery path and headed above 1.23..
• Current range: 1.2280 to 1.2360.

Further levels in both directions:

• Below:  1.2280, 1.2250, 1.2140, 1.2042 and 1.1876.
• Above: 1.2360, 1.24, 1.2440 and 1.25
• 1.2250 is strong support. If it breaks, we could see a quick fall.
• 1.2360 is now strong resistance.

EUR/USD Fundamentals

• 7:00 German Trade Balance. Exp. 18.1 billion, actual 20.6 billion.
• 7:45 French trade balance. Exp. -4.5 billion, actual -4.6 billion.
• 12:30 US NFIB Small Business Index. Exp. 96.6 points.
• 15:00 US JOLTS job openings. Exp. 4.81 million. Also note the “quits” number”.
• 15:00 US IBD/TIPP Economic Optimism. Exp. 47.2 points.
• 15:00 US Wholesale Inventories. Exp. +0.1%.

* All times are GMT.

For more events and lines, see the EUR/USD.

EUR/USD Sentiment

• Greek presidential elections: Yes, Greece is back to the headlines. The country approved a budget that did not receive the blessing of the troika. To try to defuse the situation, an extension of two months was agreed upon. However, it’s not going to be a quiet holiday season. The government in Athens announced presidential elections for December 17th. If parliament is unable to agree on a president with a wide majority within three rounds, snap elections are held. In this case, the opposition anti-bailout SYRIZA party could gain control according to the recent polls, and this could certainly complicate the situation.
• NFP echoes: The US gained 321K jobs in November, in the best report in nearly three years. In addition, wages are finally on the rise, advancing by 0.4% m/m. While this accelerated advance may be a one off, it is already good news on its own for the greenback, which reached new highs against a wide variety of currencies. We have a reminder of the US labor market conditions today, as well as the Fed favorite JOLTS number today.
• Deflation worries: ECB member Ewald Nowotny expressed a lot of concern about the danger of prices falling even further in the euro-zone and stated there is a “massive weakening” in the euro-zone. Nowotny is not a pure dove, and if he’s worried, the chances of QE are growing. The key event this week is the TLTRO on Thursday.
• Draghi did not deliver: Contrary to his sense of urgency in previous statements, the ECB president did not announce any imminent QE but rather offered a “wait and see” mode for potential action in “early 2015”. It seems that the Germans pushed back and that there was a lot of disagreement. This triggered a big EUR/USD rally. However, the ECB did significantly cut its growth and inflation forecasts that were made before the recent sharp drop in oil prices. In addition, it is working on QE scenarios. Here are 5 reasons why this EUR/USD jump could be a sell opportunity.

In our latest podcast, we preview December’s big events, talk about the importance of jobless claims, the crash in oil prices and GOFO going negative:

Download it directly here.

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