The EUR/USD currency pair demonstrated resilience on December 1, 2023, holding steady around 1.1773 early in the American trading session. This stability comes despite disappointing economic indicators from Europe and mixed signals from the United States employment data. The Euro has shown strong performance, securing its position above 1.1760 even as economic reports pointed to a slowdown in business activity across the European region.
European Economic Indicators Weigh on Euro
Data released by the Hamburg Commercial Bank revealed that the flash estimates of the December Purchasing Managers’ Index (PMI) reflected declining business activity for the second consecutive month. The manufacturing index fell to 47.7, down from 48.2 in November, while the services index decreased to 52.6 from 53.1. The overall Composite PMI landed at 51.9, lower than the previous month’s 52.8.
In a somewhat contrasting report, Germany’s ZEW Economic Sentiment survey showed an uptick to 4.8 from -38.5 in November, indicating a more optimistic outlook among analysts. However, the assessment of the current situation worsened, moving to -81 from -78.7. The EU’s Economic Sentiment improved significantly, rising to 33.7 from 25.0.
US Employment Data Adds Pressure on Dollar
The US economic landscape painted a mixed picture as well. The Nonfarm Payrolls report revealed that 64,000 jobs were added in November, a rebound from a decline of 105,000 in October. Despite this, the unemployment rate climbed to 4.6%, exceeding expectations and the previous rate of 4.4%.
Additionally, the ADP Employment Change report indicated an average addition of 16,250 private sector jobs for the week ending November 29, up from 4,750 the prior week. The stagnation in October Retail Sales, which remained unchanged after a revised gain of 0.1% in September, further contributed to the US Dollar’s underwhelming performance.
The EUR/USD pair initially flirted with the 1.1800 mark before retreating, maintaining a bullish bias as it continued to trade within a limited range.
Technical indicators suggest that the EUR/USD pair remains in a strong position. On the four-hour chart, the 20-period Simple Moving Average has crossed above both the 100 and 200 SMAs, indicating a positive outlook. The price currently holds above these averages, with the 20 SMA providing dynamic support at 1.1744.
The Momentum indicator is also moving above its midline, while the Relative Strength Index (RSI) is positioned at 69.2, reflecting increasing buying pressure. In the daily view, the pair is trading above all moving averages, with the RSI at 72, maintaining an upward trajectory.
As economic conditions evolve, the performance of the EUR/USD pair will remain a focal point for investors and analysts alike, especially in light of upcoming economic reports and market reactions.
