EURUSD: Euro growth potential remains, while traders ignore weak data for the Eurozone

China and the United States continue to move around the market. Yesterday, the Treasury Secretary said that it would be a real agreement.

First of all, the trade agreement will cover intellectual property, technology and currency issues, which in the future will support the growth of employment in the United States. The US Treasury Secretary also noted that in the absence of a real agreement, the fees would be increased.

Data on manufacturing activity was released yesterday, putting pressure on the euro, but buyers managed to cope with it. According to the report, a decrease in activity in the manufacturing sector was observed in France and Germany, but only in Italy, the PMI supply managers for the manufacturing sector in November remained below 50 points and amounted to 48.6 points against 49.2 points in October. The main decline is associated with a reduction in production and new orders by Italian companies.

According to IHS Markit, the PMI purchasing managers index for the manufacturing sector in the eurozone dropped to 51.8 points in November of this year, while in October the eurozone manufacturing PMI was 52.0 points. Economists had expected the index to drop to 51.5 points.

Regular weak fundamental data on the Eurozone once again confirm the fact that the growth rates of the economy at the end of this year began to slow down again, which will affect the actions of the European Central Bank in the future.

As for the US data, activity in the US manufacturing sector in November of this year, on the contrary, continued its growth due to the demand for American goods and an increase in employment in the sector. According to the report of the Institute for Supply Management, the PMI Purchasing Managers Index for the manufacturing sector in November 2018 rose to 59.3 points against 57.7 points in October. Index values above 50 indicate an increase in activity. Economists had expected the index to be 57.9 points in November.

Expenses in the US construction sector declined in October, which is directly related to seasonal fluctuations. According to the US Department of Commerce, expenses decreased by 0.1% compared with the previous month and amounted to 1.309 trillion US dollars per annum. Economists had expected spending to rise 0.3% in October. Compared with the same period of the previous year, total construction costs in October rose by 4.9%.

The speech of the Fed representatives yesterday did not greatly affect the market.

Interesting statements were made by Neil Kashkari, who still considers the increase in interest rates a bad idea. Qashqari noted that low-key inflation is not an argument in favor of raising rates, and the Fed has plenty of time to determine if a warmed-up labor market will provoke a rise in inflation. The Fed representative also believes that full employment has not yet been achieved and the potential for growth in the labor market will remain fairly good in the future.

As for the technical picture of the EURUSD pair, it remained unchanged. The bulls are still aimed at a large resistance level of 1.1400, a breakthrough of which will lead to a stronger upward trend in the euro, with the highs around 1.1440 and 1.1480. In the case of a decline, major support levels are seen in the 1.1310 area.