AUD/USD: 0.9075EUR/USD: 1.3575The Euro attempted to break higher today, buoyed by the news of an agreement by Germany's 2 main political parties which would see Angela Merkel stay in power until 2017. It was assisted by better than expected German consumer confidence data which saw the Euro reach a high of 1.3612 before it retreated to levels seen roughly this time yesterday after better than expected US consumer sentiment and manufacturing data, and currently sits pretty much unchanged on the day against the dollar.
The University of Michigan index of overall consumer sentiment was revised up to 75.1 in November from 72.0 (exp 73.5), while the Chicago Purchasing Managers Index also rose by more than expected and offset the slightly under-performing Durable Goods orders. The US Jobless claims also showed an unexpected improvement and helped the dollar to recover from its lows.
There will be a bit of EU data out later on today, headlined by the German inflation figure, but with the US being closed for a US holiday I would not expect too much volatility, although the 4 hour charts do appear to have made a turn to the downside and the risk appears to be for a mild test lower.
A session of sitting between 1.3530 and 1.3600 would not surprise in the absence of the US, but the points to watch are at, on the downside, 1.3560 (23.6% of 1.3398/1.3612) and then 1.3530 (38%) below there would see a run back to 1.3500, 1.3480 (61.8% and 1.3460 (rising trend support).
On the topside the Euro needs to regain 1.3600 and then the session high at 1.3612 although the shorter term indicators suggest that this looks a little less likely at present. If wrong, 1.3627 (61.8% of 1.3832/1.3294) would present the next barrier, above which would see further advances towards 1.3710 (76.4%) but which appears well out of touch for now.
Use 1.3530/1.3600 as a guide, with a mild bias to the downside.
Economic data highlights will include:
US Thanksgiving Day, German Unemployment, CPI, EU Business Climate, Private Loans, Consumer/Industrial Confidence
