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During the previous trading week, the EUR/USD currency pair continued its long-term negative trend, by falling below the 1.07 major level in the middle of the week, due to the hopes that the Federal Reserve will raise interest rates at its meeting next month. However, on Thursday, the Dollar trimmed losses, after the release of mixed US housing sector data. According to the US Commerce Department, the housing starts dropped 11% to 1.060 million units last month from September's total of 1.191 million units, while analysts had expected a decline of 3.9% to 1.160 million. Nevertheless, The Euro fell sharply on Friday. after European Central Bank President Mario Draghi gave the clearest signal that the bank may unveil fresh stimulus measures at its December meeting.
This week sentiment deteriorated further, as only 35% of participants in our weekly quiz expect the Euro to rebound. In course of the working week, analysts are waiting for a big portion of fundamental data. It includes Wednesday's data on US durable goods orders, personal spending, new homes sales and consumer sentiment and a report on initial jobless claims, which will be released one day earlier than usual, because of the Thanksgiving holiday. As Jignesh suggests, "Last week reaffirmed the markets that the ECB will continue further stimulus if required and the FED is ready for lift off. This once again strengthens the point of divergence between the monetary policies of both economies."
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