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US economic growth slowed to a 1.5% annual rate in the third quarter, held back by a large inventory drag that took 1.44 percentage points off the GDP. Surprisingly, trade was a neutral factor, as exports and imports largely offset one another. Meanwhile, consumer spending grew at a 3.2% rate, down from 3.6% in the second quarter. However, US consumer spending rose just 0.1% in September after climbing 0.3% and 0.4% in July and August, while the September's increase was the smallest since March. Meanwhile, the Euro zone economic confidence rose unexpectedly to 105.9 in October, above economists' expectations of a drop to 105.1, posting the fourth straight monthly increase. Nevertheless, the Dollar eased gains on Thursday, but remained close to two-and-a-half month highs after the Federal Reserve indicated that it may raise US interest rates at its next meeting in December.
According to Dukascopy Community members, the most traded currency pair will continue the bearish tendency. This idea is supported by the 61% of Dukascopy traders. "After dropping below the weekly uptrend line, it is expected that pair will continue it downward trend. If it will break above 1.11 level on the daily chart, then, the pair will resume recent uptrend, and will try to reach recent resistance which is at 1.14" said trader Drishti.
Meanwhile, on Thursday and Friday, the US initial jobless claims and report on nonfarm payrolls will shed some light on the further possible pair's development.
but the pair recovered on Friday, when it was announced that French industrial production was unchanged despite negative estimates. With beginning the week at 1.25 major level, the pair finished it 43 pips lower at 1.2457.
Comparing to the previous week, the pair's sentiment deteriorated, as now 40% of all votes are bullish on the cross. The average expectation for November 14 stays around the closing level of last Friday just above the 1.2450 level. Among important influencing factors for the EUR/USD pair this week, the Eurostat will release its flash estimate of currency bloc's GDP for Q3 on Friday, as it is predicted to add 0.1%. Moreover, US core retail sales are projected to rebound, while consumer sentiment is likely to remain strong and unemployment claims to stay at their lowest levels since 2008.
© Dukascopy Bank SA