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EUR/USD – Edging higher after bounce off key Fibonacci level

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  • Euro area data points to further weakness in early 2024
  • Germany remains a concern amid weak factory numbers
  • EURUSD higher but struggling around 1.10

It was a volatile end to the week for the dollar, with the jobs report initially causing a stir followed by the unexpectedly weak ISM services PMI.

Today it’s been Europe that’s delivered a selection of data, albeit none quite as important as the two from the US on Friday. Retail sales for November were in line with expectations at -0.3% while the October number was revised higher to 0.4%. Neither are particularly inspiring and continue to point to a region likely in recession.

Factor orders from Germany were no more inspiring and suggested the start of 2024 could remain difficult for the manufacturing sector. The Sentix investor confidence survey was also uninspiring despite the slight improvement to -15.8. It is improving gradually but it suggests investors are still not optimistic about the year ahead.

A correction or not?

EURUSD is higher again at the start of the week after failing to break 1.10 on Friday before ending the session flat.

EURUSD Daily

Source – OANDA

This came after it rebounded off the 61.8% Fibonacci retracement level earlier in the session, a move that could potentially be a bullish signal after a week-long correction. A move back above 1.10 could further support that view, while a move below Friday’s low may suggest any correction has longer to run, or it isn’t actually a correction at all.

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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