Eur/usd - page 319

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EUR/USD forecast for the week of August 31, 2015

The EUR/USD pair initially broke out during the course of the week, clearing the 1.15 barrier. This is an area that has been massively resistive in the past, and quite frankly should have signified a break out to the upside for the longer term. Nonetheless, it looks as if the sellers came into the marketplace and really punish the Euro towards the end of the week. In fact, we even managed to drop below the 1.12 level, which is a very negative sign. Overall, this is a marketplace that is far too volatile for longer-term traders to be involved in.

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sherif fares:
EUR/USD broke the psychological support 1.1200 and now heading for the next support line 1.1160. but I don't think there will be a break before the market close.

I think we can expect it to fall much lower than that next week. It will likely reach 1.1070.

 

Interesting to see developments from here...

 

EUR/USD closed above the MA(20) but a further drop is expected next week let's see i am waiting for the price under the support line 1.1160.

 

EUR/USD Forecast Aug. 31 – Sep. 4

Roller coaster does not begin to describe the week that EUR/USD underwent. A leap to highs unseen in months continued with big fall. Volatility is set to continue as traders return to their desks and the ECB makes its statement. Apart from Draghi we also have employment, inflation and PMI data. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

The fear that gripped markets continued helping the euro. The common currency has become a funding one and that was clear with the leap above 1.17. However, this didn’t last too long: not only the Fed can be more dovish but also the ECB. A hint about monetary stimulus and a rebound in atmosphere and stocks sent the pair down. Also a better than expected GDP read from the US helped the dollar regain its strength. In the euro-zone, the solid German business sentiment helped the euro early in the week while other figures did not surprise. Another exciting week awaits us. Let’s start:

  1. German Retail Sales: Monday, 6:00. Consumer activity at the euro-zone’s core country disappointed with a big fall of 2.3% in June. German demand is critical for the whole area. A rebound is on the cards now.
  2. Flash CPI: Monday, 9:00. These figures are critical for the ECB decision later on. In July, inflation remained low at 0.2% y/y while core inflation was initially set at 1% before the final read of 0.9%. This data was somewhat encouraging for the ECB: low oil prices still impact headline inflation while underlying demand that effects core prices is better. In August, we had the big crash in oil and that could weigh on headline inflation. However, expectations stand on +0.2% for the headline number and 1% on core inflation.
  3. Manufacturing PMIs: Tuesday morning: 7:15 for Spain, 7:45 for Italy, 7:50 for France (final), 7:55 for Germany and the final euro-zone read at 8:00. According to Markit, Spain, the zone’s 4th largest economy, has seen OK growth in July, with a score of 53.6 points. A rise to 53.9 is on the cards now. Italy, the third largest economy, enjoyed stronger growth at 55.3 and another advance to 56.2 is expected. France remained in contraction territory in August according to the preliminary read: a score of 48.6 which is below the 50 point mark separating growth and contraction. Germany countered that with 53.2 and the overall score stood at 52.4 points. The last 3 numbers will likely be confirmed.
  4. German employment change: Tuesday, 7:55. In June, the area’s locomotive disappointed with a rise in unemployment: 9000 were added to the unemployment lines. The country enjoyed improving conditions for many months. Has the tide turned? At least for now, a drop of 5K is predicted, making the rise last time a one off, if this forecast is realized.
  5. Unemployment rate: Tuesday, 9:00. While the jobless rate is below the highs, it is still quite troubling at 11.1% in June, refusing to drop. The economic growth is not really reflected in jobs. No change is expected.
 

German Retail Sales Beat Estimates in July

Retail sales for Germany posted better-than-expected results in the seventh month of 2015, according to the latest report from the German statistical office (Destatis) released on Monday.

Retail turnover rose 1.4% in real terms month-on-month in July, up from a 2.3% decline recorded in the previous month, coming in above market expectations of a 1.1% increase.

Measured on an annual basis, the gauge advanced 3.3% in the reported period following an increase of 5.1% in the preceding month, while analysts had projected a pick-up of 1.7%.

Turnover in retail trade was in the first seven months of 2015 was in real terms 2.6% and in nominal terms 2.5% larger than in the corresponding period of the previous year, the report said.

The retail sales index, also known as 'real retail sales', is the primary gauge of consumer spending which measures the change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. The figure is also an important component of GDP.

Germany's economy is expected to continue on a positive path and grow well in the second half of 2015, the German Bundesbank predicted last week in its monthly bulletin.

 

On Friday session the EURUSD pair fell for the fourth straight day and closed in the red near the low of the day on a narrow range. The currency made a stronger pullback and is trading within a daily support zone from 1.1237 down to 1.1097. A break above the 1.1237 will suggest another up run to 1.1555.

 

On Friday the euro recorded a fall against the dollar. The single currency depreciated for the fourth consecutive session and thus came close to the support at 1.1105. In the short term it is expected price correction and the pair to recover some of the losses by testing the resistance at 1.1329. Trade on Friday launched at 1.1244 and finished 58 pips below. Bulls prevailed in the early hours of the session, but then later the direction was changed and currencies hit bottom for the day at 1.1155.

 

Euro holds modest gains after euro zone inflation data

The euro remained modestly higher against the softer dollar on Monday after data showing that euro zone inflation remained low in August, adding to concerns that the European Central Bank may scale up its stimulus program.

EUR/USD was last at 1.1207, holding below early highs of 1.1262.

Eurostat said the annual rate of inflation in the single currency bloc rose 0.2% in August, unchanged from the previous month, but slightly higher than forecasts of 0.1%.

The ECB targets inflation of close to, but just below 2%.

Core inflation, which strips out food and fuel costs, remained steady at 1.0%.

Last week, the ECB’s chief economist warned that risks to its medium-term inflation target have increased and indicated that the bank is prepared to expand its economic stimulus program if necessary.

ECB Executive Board member Peter Praet said lower commodity prices and signs of economic weakness mean there is an increased risk that the euro area will miss its inflation targets.

The ECB is to hold its next policy meeting on Thursday and President Mario Draghi will announce the latest growth and inflation projections at the post-policy meeting press conference.

The euro and the yen had risen against the dollar earlier Monday as renewed weakness in equities markets overnight pressured the greenback lower.

Chinese shares turned lower after a 10% rally in the previous two sessions, amid renewed concerns over the health of the world’s second-largest economy.

Demand for the euro and the yen was boosted as heightened risk aversion underpinned demand for the low-yielding currencies to fund investment in risk assets.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.13% to 96.03, but remained well above the eight-month trough of 92.52 set last Monday.

The dollar’s losses were held in check by hopes that the Federal Reserve may still raise interest rates as soon as next month.

Investors were looking ahead to Friday’s U.S. jobs report for August, which could help to provide clarity on the likelihood of a near-term interest rate hike.

Markets were also awaiting Chinese data on Tuesday which was expected to show that the rate of economic growth is continuing to slow.

The euro was slightly lower against the yen, with EUR/JPY dipping 0.12% to 135.88.

Meanwhile, USD/JPY was down 0.37% to 121.24, off Friday’s highs of 121.73.

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The EUR/USD consolidation continues and the pair is still testing the support at 1.1200. This might continue until the ECB rate decision on Thursday.

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