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Daily FX View: USD Rebounds, EUR May Gain Despite Weak Data

USD recovers from lows seen late yday after Yellen testimony, rebound accelerates on poor
European data; technicals signal potential reversal vs EUR.
** French 3Q P GDP -0.1% q/q vs est. 0.0%; 3rd decline in past 4
qtrs; German 3Q P GDP 0.3%, down from 2Q 0.5%; Italian 3Q P GDP
-0.1%, 9th consecutive decline, though improving
** UK Oct. retail sales ex-auto -0.6% m/m vs est. -0.1%,
exhibiting downward bias since Feb.'s 2.1% rise
• EUR/USD: Technicals point to gains in coming sessions despite overnight price action
• Reverses ydy's breaches of congested resistance
• MACD differential, RSI, stochastics all rising from oversold levels
• Resistance: ~1.3440-1.3470 congested levels from Aug. 20 high, Sept, Oct., early-Nov. lows
• Support: 1.3295 Nov. 7 low
• GBP/USD: Downward bias remains; reverses post-Yellen rally on retail sales
• Consolidates yesterday's sharp rally:
• Continues to make lower intraday highs/lows since Oct. 23; MACD, RSI, stochastics in negative divergences; stochastics crossing lower
• Resistance: 1.6067 Nov. 13 high; ~1.612 Oct. 22 low, Nov. highs
• Support: ~1.59 Oct. lows; 1.5855 Nov. 11 low
• USD/JPY higher, upside limited; rally recommences test above 100
• Cross overbought, warning of potential retracement
• Resistance: 100 psychological; 100.18 76.4% Fibonacci of Jul.-Aug. decline; 100.61 Sept. high
• Support: 99.17 Oct. 17 high; 98.85 Nov. 1 high
• NOTE: TJ Marta is an FX strategist who writes for First Word. The observations he makes are his own.