EUR/USD MAKING A COMEBACK
The EUR/USD keeps rising despite the anticipated positive outcome of the vote on tax cuts in the US which is also likely to lead to increased volatility levels. The optimism of the EUR/USD bulls has not changed despite the positive macro statistics on the growth of US building permits to 1.30 million in November, compared to 1.27 million forecasted. At the same time, housing starts increased to 1.30 million against the 1.25 expected. Previously the German Ifo business climate index in December reduced to 117.2 which is 0.4 worse than expected. Tomorrow, the focus of the markets will be on the current account balance in the Eurozone and existing home sales in the US.
The British pound is getting support from the weaker US dollar and mostly positive news concerning the Brexit talks. Earlier, the British Prime Minister, Theresa May commented that negotiations on the official terms on exiting the UK from the EU are progressing. The amplitude of price fluctuations of the sterling is reducing which may point to a sharp movement soon.
The New Zealand dollar has not shown a confident increase against the greenback despite the weakening of the US dollar. Some pressure on the kiwi came from the Westpac consumer sentiment index which decreased to 107.4 in the fourth quarter. Today, volatility is likely to increase after the publication of important trade balance data in New Zealand at 21:45 GMT.
The EUR/USD has recently reached resistance at 1.1825 and the price fixing above it may become the strong basis for continued price increases to 1.1925 and 1.2000. The RSI on the 15-minute chart is near the oversold zone and we may see the price correction soon to the SMA100 on the 15-minute chart or even to the 1.1730-1.1750 range.
The NZD/USD keeps consolidating within the limits of the sideways corridor 0.6980-0.7030. In case of overcoming the support line at 0.6980, we may see continued price drops to 0.6950 and 0.6890. On the other hand, gaining a foothold above 0.7030 will open the way for a further price increase to 0.7200.
The GBP/USD keeps moving along the strong inclined support line and in case of the price breaking through it and overcoming the local low near 1.3300, the immediate goals will be 1.3150 and 1.3050. We do not exclude the price rebounding from the support line as a result of which the quotes may return to 1.3400.