Eur/usd - page 232
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EUR/USD forecast for the week of March 2, 2015
The EUR/USD pair fell hard during the course of the week, closing towards the bottom of the range. That being the case, looks as if the EUR/USD pair will probably fall from there, heading to the 1.11 handle next, and then the 1.10 level. Any rally this point time should be a nice selling opportunity and we believe that the 1.15 level is massively resistive. We like rallies the show signs of resistance, as it offers value in the US dollar. If we break down below the 1.10 level, this market could very well fall to the parity level next.
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ECB braces for QE as others shift rates
Greek funding and quantitative easing in Europe, an expected rate cut in Australia and the buoyant U.S. labor market are set to be the focus of an economic week dominated by a host of central bank meetings.
Greece may have secured an extension of its bailout last week, but it remains reliant on emergency funding.
The European Central Bank's Governing Council convenes in Cyprus on Thursday and may take a decision on whether to accept Greek government bonds as collateral for its direct ECB funding, which it stopped doing at the start of February.
If the ECB does not - and it most likely will not - it could be forced to prolong the provision of Emergency Liquidity Assistance (ELA) to the Greek central bank.
"The Greek question will be a hot topic," said ING Chief Eurozone Economist Peter Vanden Houte. "(Greek Finance Minister Yanis) Varoufakis has been saying the country is counting on the ECB for finances over the next few months."
ECB President Mario Draghi is also expected to provide further details on the bank's 1 trillion euro ($1.1 trillion) government bond buying program, which begins in March.
He may face questions about the program's ability to reach its target, such as how the ECB intends to convince domestic banks to sell their government debt, with the prospect of then parking the money with the ECB at a negative interest rate.
The ECB will also release new economic forecasts. Chief Economist Peter Praet said last week that it was likely to revise upward its expectations for growth in the euro zone, with low oil prices and a weak euro helping.
read more
ECB may begin QE purchases on 9 March
So says the newspaper Il Sore 24 Ore citing unnamed Eurozone sources
Take it for what you believe it's worth. I'm just reporting the news via Bloomberg
Spain's Factory Activity Continues in Buoyant Mood: Feb PMI
Activity in Spain's manufacturing sector continued to expand in February, signaling a solid strengthening of business conditions, the latest release from London-based Markit Economics showed on Monday, providing further welcome news for the Spanish manufacturing sector and the country's economy as a whole.
Moreover, workers are increasingly feeling the benefit of growth with many companies continuing to expand their staff levels. The combination of increased new business, work in the pipeline and rising employment suggest that production growth should continue in the months ahead.
The PMI for the manufacturing sector of the euro area's fourth largest economy reached 54.2 in February, after the 54.7 recorded in January, while market analysts had predicted the index would reach 55.1.
The sector has now seen more than a year of unbroken monthly increases in production.
"The February manufacturing PMI data for Spain provide more positive signals as the sector continued to grow at a solid pace. The strength of the expansion in new business was particularly pleasing, with the latest rise the fastest since prior to the economic crisis. The same was true for backlogs of work, suggesting that capacity at manufacturing firms is beginning to be tested. Meanwhile, firms continued to see sharp falls in costs, with oil-related items leading the decline," Andrew Harker, senior economist at Markit, said.
Services PMI
The services PMI release is scheduled for Wednesday. January's figure came in at 56.7.
Euro Zone Factory Activity Gains Traction: Feb PMI
Activity in the manufacturing sectors across the euro zone pointed to gradually improving conditions in February, the final report from Markit Economics showed on Monday. Economic growth appears to be gathering momentum and looks set to gain further traction in the coming months.
The final manufacturing PMI for the euro zone came in at 51.0 points in February, same as the January's 6-month high, and remaining in expansion territory for 20 straight months. Analysts had bet on the same reading as the preliminary 51.1 points result.
"The eurozone manufacturing sector barely expanded in February, highlighting the malaise that still hangs over the region’s goods-producing economy as a whole. However, beneath the disappointing headline figure, different parts of the manufacturing economy are clearly moving at very different speeds, ranging from a Celtic boom to a Gallic slump," according to Chris Williamson, chief economist at Markit.
"Coming months will hopefully see all countries’ manufacturing sectors pick up speed, as business and consumer confidence is buoyed by ECB stimulus. The recent fall in the euro should also provide a noticeable stimulant to export sales."
Four biggest economies
In the euro area's biggest economy, Germany, final figures showed the manufacturing sector maintained expansion with a reading of 51.1.
However, in France, the bloc's second largest economy, the manufacturing sector remained very weak with the final February manufacturing PMI registering 47.6 points.
Italy's manufacturing sector, after balancing on the edge between contraction and expansion for some time, showed an improved result in February with a nice upward tick to 51.9.
The PMI for the manufacturing sector in Spain, the euro area's fourth largest economy, reached 54.2 in February, after the 54.7 recorded in January.
Services PMI
The services PMI release is scheduled for Wednesday. Analysts expect a nice upward move to 53.9 after January's figure came in at 52.7.
ECB's QE to boost euro zone economy
Markets wait for the European Central Bank (ECB) to launch its signature quantitative easing (QE) program on Thursday. In January, the ECB unveiled a QE program to support the euro zone economy, which will deliver €60 billion of fresh liquidity monthly until September 2016, bringing the total size to roughly €1.1 trillion.
The Draghi policy is supposed to tame deflationary trends, jump start the crawling economy in the euro zone and trickle down to the "real economy", boosting demand in the single currency area.
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EURUSD tried to rally during Friday’s session, but found enough resistance at 1.1236 giving back all of the gains to close slightly below the 1.12 Level. The resulting candle was a doji signaling some indecision in the market. We are at “no man’s land” between 1.1236 downward to 1.1097.
Pair Breaches $1.12 as Euro Zone Deflation Continues
The latest CPI for February on a yearly basis printed -0.3%, down from last month's -0.6%, but still in negative territory and it means that the euro zone is still in deflation, Eurostat informed on Monday.
Moreover, the unemployment rate for January ticked lower to 11.2% from a revised 11.3% seen in December.
The euro jumped before the release and was trading at $1.1210, supported mostly by mixed PMIs , while the pair showed no change after the CPI was published, remaining slightly higher on the day.
Earlier in the day, the Spanish manufacturing PMI dropped to 54.2 from 55.1, the Italian PMI ticked higher to 51.9 from last month's 49.9, the French PMI edged lower to 47.6 and the German PMI jumped to 51.1, from 50.9, while the entire euro zone PMI eased to 51.0 from February's 51.1.
The equivalent manufacturing PMI index is also expected from the US and should stay at 54.3, while the US economy will also reveal ISM's manufacturing gauge, which is predicted to soften from last month's 53.5 to 53.0.
"The EUR/USD rate fell toward the end of last week and is within a big figure of the post-QE announcement low of 1.1098. We suspect that a breach of this low this week is more likely to come from developments on the US side rather than on the euro-zone side. Hence, a strong jobs report and a rise in short-term US yields are probably required for a new low this week - that is certainly feasible although the cold snap in the US throws an element of uncertainty into the key jobs data on Friday," analysts at Bank of Tokyo-Mitsubishi wrote on Monday.
Technical analysis
EUR/USD is moving sideways on intraday charts, after a huge sell-off from the mid $1.13's level. The current swing low lies at $1.1159.
From a bigger perspective, EUR/USD is now on the way to lows from January at $1.1096 after a very short lived correction, lasting a little bit over a month.
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EURUSD inflated towards 1.1250
EUR/USD continues to grind higher after the inflation data and we're up to 1.1235 from the overnight lows at 1.1160
Resistance is seen here around 1.1240/50, which was the highest we got to after the drop through 1.1200 late last week
There's more resistance seen around 1.1260/80 & 90, ahead of 1.1300, then further at the short term trend line and 55 & 100 ma's around 1.1325-1.1338
It looks like we're just roaming around ahead of the US data, rather than making a proper move so it could all be quickly undone if the numbers are strong later.
The euro is generally looking bid across the board with EUR/GBP and EUR/JPY both up too
I guess we won't see a lot of volatility until the release of the Nonfarm Payroll & the unemployment rate.
EUR/USD: Starving Bears Seek 'Dollar Soup'
The EUR/USD pair was trading around the intraday break-even on Monday afternoon, as bears managed to push the cross down from a previous intraday high seen during European trading hours.
The US dollar slipped 0.05% to trade at $1.194 against the euro currency, proficiently below Monday high at $1.1239 as the EUR/USD pair abandoned its attempt to recover from a huge 150 pips drop on last Friday.
Meanwhile, the Consumer Price Index (CPI) in European Union posted a drop of 0.3% on yearly basis in February, beating a survey of 0.5% drop, an improvement from last month's -0.6%. Moreover, the unemployment rate in European Union surprised on upside, as new data shoved a reading of 11.2% in February, a decline from 11.4% seen previously.
US manufacturing data
Monday calendar in the US offered fresh set of macro data, which helped the greenback to regain almost all previous losses.
First, the US Bureau of Economic Analysis revealed that personal income rose 0.3% in January month-on-month, compared to the 0.3% increase seen in December, while personal spending dropped 0.2% in January, compared to the 0.3% fall the month before.
Then shortly after the opening bell, the Markit Economics' gauge improved to 55.1 from 53.9 in January. The reading came out better than the anticipated update of 54.3 for February. Moreover, the fresh update of PMI manufacturing was the strongest since October 2014.
ISM's manufacturing PMI hit 52.9 points in February and the lowest reading in thirteen-months, slightly worse than expected the 53.0 points, a slow-down to the 53-point expansion in January
Technical analysis
EUR/USD is moving sideways on the intraday charts, after a huge sell-off from the mid $1.13's. The current swing low lies at $1.1159.
From a broader perspective, EUR/USD is now on the way to lows from January at $1.1096 after a very short lived correction, which has lasted a little over a month.
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