Eur/usd - page 326
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On Friday session the EURUSD pair rallied for a second straight day and closed in the green near the high of the day with a narrow range. The currency is in a well-established bullish phase after the golden cross last week and trading well above the 10-day moving average.
The key levels to watch today are 1.1495 (Resistance) and 1.1237 (Support) and we may have a pullback to the 1.1237 (Support) before another push upward.
EUR/USD: Dollar Shakes Off Losses to Hit Daily Highs
The EUR/USD pair erased all daily gains and dropped to daily lows, more than 50 pips off daily highs. It was seen around $1.1320, heading into US trading hours.
Earlier in the session, industrial production in the euro zone for July improved from the upwardly revised -0.3% to 0.6% month-on-month, while the yearly print came out at 1.9%, also increased from the upwardly revised 1.5% previously.
"Current very low oil prices and weakened commodity prices are very helpful for Eurozone manufacturers. Additionally, the euro is still at a supportive level for Eurozone manufacturers, even if it has firmed from the lows seen around March," Howard Archer, chief UK + European economist at IHS Global Insight wrote on Monday.
On Tuesday, ZEW surveys for September from Germany will be published and are expected to decelerate from August' levels, but should not cause any major volatility.
More movements are likely to come later in the US session on Tuesday as the US is releasing retail sales figures for August. Sensitivity to US data has been declining in recent weeks as the FOMC meeting looms.
Traders are anxiously waiting for Thursday's monetary policy decision, but the Federal Reserve (Fed) is not expected to raise rates quite yet, according to the latest data from Fed funds futures. The action will likely come later in the year, most likely in December.
The dollar will therefore likely decline if the Fed does not hike rates, but economic projections, along with the dot plot, might leave markets confused if they come out on the hawkish side. The dot plot will be a very important measure at Thursday's meeting.
source
The euro recorded a rise on the last day of the week. The EUR/USD opened at a price of 1.1278 after steady upward trend throughout the session and in the end closed at a rate of 1.1341. The pair managed to break the first resistance at 1.1290 and if the trend continues, the next target will be the second resistance at 1.4300.
EUR/USD rebounded from the weekly resistance 1.1370 I don't think any major support or resistance will be broken or a wide range of movement to happen until the interest rate decision.
EUR/USD: Complex Correction & Not Clear Set-UP - Nomura, Goldman
EUR/USD is in the process of correcting the 1.17 to 1.11 decline, notes Nomura Techs.
"It is complex correction that is expected to complete via 2 a-b-c rallies, currently the latter stages of the second a-b-c are unfolding. A rally from near 1.13 to 1.14 can complete the larger wave-B," Nomura argues..
"S/t, support via old pivots and an uptrend line is between 1.1300/1288, more critical support below is 1.1254. Resistance is 1.1340 and then the recent pivot high at 1.1374," Nomura adds.
All in all, Nomura is looking for a small decline in EUR/USD followed by a strong bounce to new highs.
Turning to Goldman Sachs, their technical strategy team also note that the setup in EUR/USD isn’t very clear.
"A complete correction should retrace within wave 4 territory and near 38.2% of the preceding trend. In this case the high at 1.1713 is near enough to 38.2% at 1.18 and actually exceeds the 4 th wave (1.1533-1.1099). Moreover, an ABC extension from the March low targets 1.1818 (again, near enough?)," GS argues.
"At this point it seems reasonable to take a neutral stance until further signal develops," GS advises.
EUR/USD: Euro Treads Water as Fed Decision Looms
The shared European currency remained in a narrow trading range and virtually flat on Tuesday. The European calendar will offer some important data today, but mostly linked to the UK economy and therefore mainly influence the cable currency pair.
Germany, however, will see the release of the ZEW Economic Sentiment Index for the next six months. The survey is expected to decline to 19.0 in September from the 25.0 measured in August, while the Current Situation Index, reflecting institutional investors' opinions of the current situation, is also expected to fall to 64.5 from 65.7 in the previous month.
The euro traded flat but remained firmly above the $1.13 handle at $1.1317.
Although most investors will stay on shy away from any bolder action ahead of the Thursday's Federal Reserve (Fed) decision, Tuesday's US session will offer some important macro data, with most of the focus on retail sales and industrial production data.
Markets expect three different scenarios from the Federal Open Market Committee (FOMC), which will start its deliberations tomorrow. The first and the most probable, according to recent moves on the majors versus the US dollar, is that Fed will do nothing. In other words, we can expect the FOMC to announce that it is too early to act as despite significant improvement on the US labor market, its second mandate, inflation, remains far from the target of 2%.
The second scenario would be switching the target range of 0.25% - 0.50% into a target rate of 0.25%, while the third scenario suggests an actual rate hike by 25 to 50 basis points. An actual hike in interest rates is, however, seen as unlikely given the current market positioning.
Analysts say that most majors will see a short-term strengthening rally against the USD following the meeting, but this is likely to dissipate as their longer-term trend in the second half of the year is further weakened against the USD.
source
EUR didn’t record a significant change on Monday, despite the relatively volatile session. The pair recorded a small fall, but failed to break through levels at 1.1290. Relative strength index moved in positive territory as the pair remains above the 100-period moving average. Break of 1.1290 will target EUR/USD to 1.1180.
Yesterday the EURUSD went back and forward with a narrow range, closing in the red shy below the open of the day. The currency made a pause after a straight 2 day rally suggesting that traders are taking their foot off the gas as the main event for this week and the one that all markets have been waiting for, the FOMC meeting will take place on Thursday the 17th September. The key levels to watch today are the same of yesterday 1.1495 (Resistance) and 1.1237 (Support).
German Investor Optimism at 10-Mth Low in September
Optimism among German analysts and investors faded in the ninth month of the year, the ZEW think-tank showed in a closely watched survey on Tuesday, amid concerns that the Chinese slowdown will be a headwind for Germany's export-driven economy
The ZEW Economic Sentiment Index, evaluating the economic outlook of about 350 respondents for the six months ahead, fell to 12.1 in the ninth month of the year, down from the previous month when the reading stood at 25 points.
The index has now seen a series of declines over the past six months. In the previous month it dropped to the lowest level seen this year.
Moreover, the Current Situation Indicator came in at 67.5 in the reported month, better than August's 65.7 and compared with analysts' forecast of 64 points.
Deterioration in the level of confidence about the future economic development in Germany among financial analysts should be interpreted with caution, Carsten Brzeski from ING points out.
"The ZEW index should be taken with a pinch of salt. Over the last couple of months, the ZEW index has been more of a low-value snapshot rather than a fundamental confidence measurement or reliable predictor of future growth," Brzeski noted on Tuesday.
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It looks like the multi-day flag on the EUR/USD four-hour filter chart is finally over. The pair is likely headed for 1.1230 and should it break below that support we can probably expect a further move to the downside.