The Chinese press reports that Deputy Prime Minister of China Liu He and US Treasury secretary Mnuchin held a telephone conversation in preparation for a meeting of state leaders during the G20 summit in Argentina at the end of November. Reports were perceived as a positive development of events, suggesting the efforts of both parties to enter into trade negotiations.
The information helped to improve the market sentiment after a turbulent Monday, when the USD rally was the main motive for active trade, even in the absence of US traders. Market attention seems to focus on the US economic condition and the outlook for monetary policy.
GBP / USD is at 1.29 in the heat of the British negative press on the chances of an agreement on Brexit, although new information on Monday suggests to the EU negotiator Barnier that the main elements of the agreement are ready.
USD / JPY is between USD and the stock market and it does not move away from 114. Information on talks between the US and China helps in the rebound of AUD (0.7210) and NZD (0.6750), which are the strongest today.
On Tuesday, the 13th of November, the event calendar is light in important data releases, but the global investors should keep an eye on German ZEW and CPI data, Claimant Count Change and Average Earning Index data from the UK and NFIB Small Business Index data from the US. There are speeches scheduled for today from ECB's Peter Praet, Member of the Executive Board of the ECB Sabine Lautenschager and FOMC Member Lael Brainard.
EUR/USD analysis for 13/11/2018:
A German Firm, the Center for European Economic Research (ZEW), queries financial experts throughout Europe every month in order to make a medium-term forecast about Germany 's economic situation. They ask experts to evaluate the current situation and to predict the future direction of the economy. For all components of the survey, responses are restricted to positive, negative, or unchanged. This simple structure allows the survey to be quick and efficient in terms of turnaround time, as well as easy to understand and interpret.
Experts are asked for a qualitative assessment of the direction of inflation, interest rates, exchange rates and the stock market in the next six months. Thus the indicator provides a medium-term forecast for the German economy.
The ZEW Economic Sentiment and ZEW Current Situation data are expected to deteriorate this month. The ZEW Economic Sentiment is expected to drop from -24.7 to -24.2 and ZEW Current Situation is expected to drop from 71.0 to 65.0.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has made a new local low at the level of 1.1213 and bounced a little towards the level of 1.1240, but this bounce is too weak to indicate a beginning of something bigger. The key short-term technical resistance is located at the level of 1.1301 and only a sustained breakout above this level would change the bearish bias. Please notice the oversold market conditions and weak momentum support the downside outlook.
