Eur/usd - page 304
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The single currency recorded a significant growth against the dollar on Monday, which was trading at a two-week high at the end of the session. The euro rose to a figure close to the final value of 1.1086. The peak of the day was recorded at 1.1127 while the bottom - at 1.0968. The graphics developed over moving averages, and as the relative strength index alludes to the dominance of the bulls. Establishment of the couple over the border at 1.1100 will strengthen the positive attitudes.
Italian business confidence July 103.6 vs 103.7 exp
Latest confidence data now out
Not key data. One for filing under "general picture"
EURUSD 1.1058 EURGBP 0.7119 EURJPY 136.75
Yesterday the EURUSD rallied and close near the high of the day with a wide range, although failed to close above the 50-day moving average. Due to the wide range day observed yesterday, we may expect that the currency today makes a narrow range or even create an inside day. Key levels to watch today are: the 50-day moving average (resistance) at 1.1114, a daily resistance at 1.1097, Fibonacci levels the 38.2% (support) at 1.1058 and the 50% (support) at 1.0955.
EUR/USD in the daily chart is supported by the MVA 20 and the high of yesterday candle act as a resistance.
Goldman Sachs: Why the EUR/USD down move has stalled & why it will resume
Goldman Sachs on why the EUR/USD down move has stalled, why they think it will resume, and their targets for EUR/USD over the coming months.
Why EUR/USD downtrend has stalled?
1- "In our minds, the EUR/$ down move from near 1.40 just over a year ago to current levels was always about regime change at the ECB, which was set in motion by falling inflation. In short, it seems the Euro down trade was about the ECB moving away from its Bundesbank roots and embracing what - in Frankfurt at least - counts as highly unconventional policy," GS argues.
2- "But the perception of regime change is a fickle thing, especially when it comes to the ECB. In May, core HICP inflation jumped to 0.9 percent from 0.6 percent in April, shaking market confidence that ECB QE would continue through at least September 2016, as announced in January," GS adds.
Why EUR/USD downtrend will resume?
3- "We think that is changing now that oil prices are again on a downtrend. In our minds, it was always a stretch for the ECB to bring annual average inflation to 1.5 percent next year. With falling oil prices, that job gets harder, putting policy doves once again in the driving seat. Our European economics team estimates that a 10 percent drop in oil prices could push inflation down around 20 bps after four quarters, so it seems safe to say that downside risk to this forecast is rising," GS projects.
4- "With that comes a rising likelihood of additional policy action, not unlike the BoJ's upsizing last October. Much like last year, the path of HICP inflation will be important in setting the direction of ECB policy. In that regard, it is worth noting that the drop in oil prices is likely to keep this Friday's flash July headline HICP at 0.2 percent year-over-year, while an unchanged reading of 0.8 percent for core HICP would signal weak sequential momentum. Perhaps more importantly, August brings a favourable base effect that could see core HICP again go lower," GS argues.
5- "It therefore looks to us that fundamentals are aligning just as market conviction is troughing, much like a year ago," GS concludes.
GS maintains its EUR/USD targets at 1.02 in 6-month and at 1.00 in 1-year.
source
The single currency registered a decrease against the US dollar yesterday, which wiped out part of the accumulated advantage on Monday. The euro depreciated by nearly 30 pips to a closing price of 1.1058. The daily limit values were recorded respectively at 1.1099 and 1.1021. Despite the retreat of the currency pair, attitudes in the short term remain positive. Keeping the support at 1.1020 will confirm the corrective character of the movement.
Yesterday the EURUSD pair moved back and forward with lack of direction closing in the red near the open of the day with a narrow range day, creating an inside day. This type of day is often used to signal indecision about the future direction of the currency as the market waits for the Fed's Monetary Policy Statement later today.
EUR/USD bounced off the resistance at 1.1100 that coincides with the (89)MA on the daily filter chart and is descending towards the support at 1.0980. That said, the FOMC rate decision later today will probably provoke quite a bit of volatility on the market so nothing is certain.
The Fed has upgraded their assessment for the economy which is going to be a step forward to the rate increase, USD was effected today by those data from the FOMC.
EUR/USD: Trading the US Advance GDP
Gross Domestic Product (GDP) is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity. Thus, publication of the US Advance GDP often has a significant impact on EUR/USD. A reading which is higher than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Tuesday at 12:30 GMT.
Indicator Background
Advance GDP is released quarterly, and provides an excellent indication of the health and direction of the economy in the past quarter. Traders should pay particular attention to this economic indicator and treat it as a market-mover.
Final GDP in Q1 posted a slight decline of 0.2%, matching the forecast. The markets are expecting much better news for Q2, with the estimate for Advance GDP standing at 2.6%. Will the estimate meet or match this rosy prediction?
Sentiments and levels
The Greek deal appears to be holding, but many wounds were left open and they will be hard to heal. There are also lots of questions left, most importantly about debt restructuring which the IMF supports. In addition, it is clear that the ECB continues hitting the QE pedal to the floor. In the US, the economy showed some strength last week, and all eyes will be on the upcoming Fed policy statement. Any hints about a September rate hike could send the greenback higher. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1290, 1.1190, 1.1113, 1.1050, 1.0910 and 1.0865.
5 Scenarios
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