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Factory output of the Euro zone's top economies: Germany, France and Italy, remained in the red territory in November, while activity in Spain's manufacturing sector continued to increase. German manufacturing unexpectedly shrank last month, with the corresponding index falling to 49.5 from 51.4, below the 50-point threshold, which separates contraction from growth. The final French manufacturing PMI came in at 48.4, down from 48.5 in October, being in the contraction zone since May. In Italy, the manufacturing PMI reading remained at 49.0 in November, unchanged from the previous month, marking 17th straight month of no growth in the sector. On top of that, Italy's GDP contracted 0.1% on quarter in the three months through September, while on annual basis, the Euro zone's third biggest economy booked a negative 0.5% GDP growth.
Spanish manufacturing output data came as a bright spotlight in the never-ending streak of negative news. Spanish manufacturing PMI rose to 54.7 last month, exceeding 52.6 recorded in October and beating market forecasts for a 52.1 reading. The headline index has been in the expansion territory above the 50-mark threshold for the whole year, after falling into contraction in November last year.
Services PMI and retail sales to drive Euro on Wednesday
Despite rather calm beginning of the week, on Wednesday statistical data from the Eurozone is likely to have the first major influence on performance of the single currency this week. Spanish and Italian statistical agencies will publish the services PMI data, while some time later the Eurostat will announce monthly retail sales in the Eurozone, which most likely rebounded in October after a sharp decline a month before.{ATTACHMENT}
EUR/USD is trading range bound by filling triangle pattern
The long-term outlook for the EUR/USD remains bearish, as the cross has been moving downwards since the beginning of July. For the time being the pair is trading within the boundaries between 1.24 and 1.25. However, any negative impetus will push the cross down to 2014 lows around 1.2360. From another side the Euro is limited by a long-term down-trend around 1.2540; therefore, the bearish scenario is most suitable for the pair at the moment.Daily chart
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From the perspective of hourly chart, it can be seen that the EUR/USD is still trading in a narrow range, which is partly explained by the long-term triangle pattern. On Monday, the Euro continued hovering around the downtrend around 1.2450, which is strengthened by the monthly pivot point and 20-day SMA. Therefore, we expect the Euro to lose value on Tuesday and cross the weekly pivot point at 1.2447, which will open the way down to this year's low at 1.2360, in order for the pair to reach it in the medium-term.
Hourly chart
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