EUR/USD continues to seesaw around the 1.0600 handle after climbing to a high of 1.0620 high following the stronger than expected German unemployment data. The report showed a new record low of 6.3% for German jobs data. The Eurozone jobless rate also fell to a four-year low of 10.7%. In addition, the November Eurozone manufacturing PMI came in at 52.8, unchanged from the prelim reading, which was in line with expectations.
The pop in the currency pair comes after the exchange rate made a fresh 7-month low on Monday at 1.0557. The ECB meets on Thursday and although it is unlikely that the new data will change the minds of the ECB policy committee, it could stem the tide of the follow through of the currency pair to lower levels. Yield differentials continue to point to a stronger greenback as the 2-year differential between the U.S. and Germany are at historically low levels.
Support is seen near Monday’s lows and then again at the March lows at 1.0480. Resistance is seen near the 20-day moving average on the currency pair at 1.0697. Momentum is flat with the MACD (moving average convergence divergence) index printing near the zero index level. The relative strength index has moved slightly higher above the oversold trigger level of 30 and is sitting at the lower end of the neutral range at 32.
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