The EUR/USD pair struggles around the 1.0500 mark on Wednesday as the US Dollar (USD) regained its strength, partially backed by risk aversion. Political turmoil in France and South Korea took its toll on financial markets, with most Asian and European indexes reflecting the dismal mood by trading in the red.
Meanwhile, the Hamburg Commercial Bank (HCOB) released the final versions of the November Services and Composite Purchasing Manager Indexes (PMIs) for European economies. German figures suffered downward revisions, but the better readings in other economies resulted in upward revisions in the Eurozone Indexes. The EU Composite PMI was confirmed at 48.3 in November, slightly better than the 48.1 previously calculated.
Additionally, the EU published the October Producer Price Index (PPI), which was up by 0.4% on a monthly basis as expected. The annual reading printed at -3.2%, above the -3.3% expected and the previous -3.4%. Finally, European Central Bank (ECB) President Christine Lagarde will testify before the Committee on Economic and Monetary Affairs of the European Parliament in Brussels. Comments about future monetary policy decisions can hit the Euro.
Across the pond, the United States (US) published MBA Mortgage Applications for the week ended November 29, which rose by 2.8%, below the previous weekly increase of 6.3%.
Coming up next, the US will release the ADP report on private employment change, while later in the day, Federal Reserve (Fed) Chairman Jerome Powell will be delivering a speech, and market participants will pay close attention to his words and any clues he may provide on upcoming monetary policy decisions.
EUR/USD short-term technical outlook
The EUR/USD pair posts modest intraday losses, still trading within familiar levels. The daily chart shows that the technical risk skews to the downside, as the pair keeps trading below all its moving averages, with the 20 Simple Moving Average (SMA) maintaining its bearish slope and providing dynamic resistance at around 1.0560. Technical indicators, in the meantime, remain within negative levels without clear directional strength.
In the near-term, and according to the 4-hour chart, EUR/USD is poised to extend its slump. The pair trades below bearish moving averages, meeting sellers around the 20 SMA. The 100 and 200 SMAs, in the meantime, accelerated south above the larger one. Finally, technical indicators are neutral-to-bearish below their midlines, favoring a downward extension without confirming it.
Support levels: 1.0465 1.0420 1.0370
Resistance levels: 1.0560 1.0625 1.0660
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