EUR/USD Prediction for December 2, 2016

The EUR/USD continued to consolidate on Thursday trading just above support near the 10-day moving average at 1.0601.  Resistance is seen near the weekly highs at 1.0685, and then the lows in October at 1.0850.  Thursday’s stronger than expected German unemployment helped buoy the currency pair.  Momentum has turned positive as the MACD (moving average convergence divergence) index generated a buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread.

Eurozone October unemployment dropped to 9.8%, lower than consensus forecast of 9.9% and with September revised down to 9.9% from 10.0% reported initially. It was not just the drop in German numbers that drove the decline in the overall number, but rates in Spain, Italy, France all declined in October, and the broad improvement ties in with broad improvements in PMIs in September.