EUR/USD hits 1.36 on better German consumer confidence

Despite ECB members’ best efforts to talk down the single currency with negative-deposit-rate warnings in recent days, the euro has climbed to 1.3613 against the dollar in early trade this morning.

The greenback has now shed some 1.5% against the euro in the past week.

German consumer confidence worked its way up to a six-year high, which is not too surprising given that the DAX has also made brand-new highs recently. The ensconcing of the new German coalition government is also supporting the attractions of the euro.

With little in the way of eurozone data due for release today, we may well expect to see additional jawboning from certain EU sources in a bid to persuade the euro down from these dizzy heights.

Later this afternoon, a plethora of US data is due for release. Durable goods orders, core and non-core, are expected to diverge slightly. It’s thought that demand for US durable goods will contract by 2% for October. Consumer sentiment is expected to show a mild increase on last month at 73.1, while Chicago PMI will probably fall back to 60.1 after the blow-out number from last month of 65.9.

Unemployment claims will be closely watched as usual, given that this is the real metric that will decide any tapering in QE next year.

Bearing in mind the gains seen in EUR/USD over the past three weeks, we may see some profit-taking so long as price action remains below the 1.36 marker. Next support comes in at 1.3563.

Spot FX EUR/USD chart

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