EUR/USD Hits Year Low as Strong U.S. Job Market and Housing Data Weigh on Euro!

EURUSD lost its shine after upbeat US economic data.It hit a low of 1.04744 at the time of writing and is currently trading around 1.04863.

For the week ending November 15, 2024, U.S. initial jobless claims rose to 213,000, which was better than the expected 220,000. This number shows a slight increase in new applications for unemployment insurance compared to previous weeks. Continuing claims also went up to 1.908 million, from 1.872 million. The four-week moving average for initial claims decreased to 217,750, down from 221,000. Overall, the labor market remains strong, and this data could influence future decisions by the Federal Reserve on monetary policy.

In October 2024, existing home sales in the U.S. rose to an annual rate of 3.96 million, a 3.4% increase from September and the largest monthly gain since February. This boost in sales is attributed to lower mortgage rates encouraging more buyers. All major U.S. regions saw improvements, especially the Midwest, which increased by 6.7%. The median home price also rose to $407,200, showing a 4.0% increase from October 2023, indicating a possible stabilization in the housing market.

Technical Analysis Overview

The pair remained below  both short-term (34 and 55-4H EMA) and long-term (200-4H MA) moving averages.

Resistance Levels: Near-term resistance is at 1.0550. A breakout above this could push the pair towards targets at  1.05780/1.0600/1.0660/1.070/1.0760/$1.0835, and possibly 1.0900. Major bullish momentum is expected only if prices surpass 1.1000, which would open the door to 1.1070 and 1.1150.

Support Levels: Immediate support is at 1.0470. A drop below this could lead to further declines to 1.0435/ 1.0400.

Indicator Insights (4-Hour Chart): The Commodity Channel Index (CCI) indicates a bearish trend, while the Average Directional Movement Index (ADX) suggests a bearish outlook.

Trading Strategy

Given the weak sentiment in technical indicators, a sensible strategy would be to sell on rallies around the 1.0528-30 mark, with a stop-loss at 1.0585 and a target price of 1.0435 for potential gains.