Eur/usd - page 471
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EUR/USD forecast for the week of August 15, 2016
The EUR/USD pair at a slightly positive we, but basically at this point in time looks like it’s ready to go back and forth and do nothing. Because of this, I’m on the sidelines and while I don’t see any particular trade on a short-term chart, I definitely don’t see it on this longer-term charts. With that being the case, I remain on the sidelines and probably will for a while. This is probably one of the more dangerous markets, simply because there are so many moving pieces, and of course concerns on both sides.
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EUR/USD: Narrow 3 Big-Figure Range Intact Next Week; Staying Neutral
EUR/USD – NEUTRAL BIAS – (1.1000-1.1300)
We set a relatively narrow three big-figure range with a neutral bias for EUR/USD last week and we see no reason really to change either for the week coming up. There is a pretty heavy economic calendar schedule in the US so there will be plenty of info to help shape monetary policy expectations.
Next week we will get the July CPI report and the release of the minutes from the July FOMC meeting. The overall risk is possibly that the markets strengthen the view that the Fed will indeed raise rates this year but we doubt to an extent that will result in any meaningful move lower for EUR/USD. The focus in the foreign exchange market is more on carry and hence if there is any move in FX in the week ahead may be more likely to come in higher yielding currencies versus the dollar that have moved more in recent weeks.
EUR/USD stability may well persist through to full trading activities resuming in early September.
EUR/USD Weekly Outlook August 15-19
EUR/USD recovered losses from the prior week, erasing the decline triggered by the strong NFP reading on August 5. The pair started the week out against its 200 DMA, the indicator served to hold the pair to the upside, as EUR/USD made another attempt at resistance seen at 1.1188.
The currency pair made headway after breaking through the weekly range resistance near the 1.1100 handle, and a rally extended into the 1.1188 resistance level. A pullback from the level was assisted by strong labor data from the US from the JOLTS job data and unemployment claims, sending the pair to a low of 1.1131. A bounce from the level gained momentum after a significant miss in US retail sales. The figure served to briefly send the pair above resistance at 1.1188, but the rally was not sustained, and the subsequent declined brought the pair back below the triple confluence resistance.
The 1.1188 level carries a confluence of resistance between a declining trendline from May 3 highs, a 76.4% Fibonacci retracement from August 2 highs, as well as spike high resistance from June 24 seen on a 4-hour chart. The level should be pivotal for price action in the near-term.
To the downside, the 200 DMA served to keep the pair bid, and the level will continue to support the pair. In the new week a clear range is now set with support at the 200 DMA found at 1.1080, and range resistance at 1.1188. In the middle of the range, the 1.1134 level can be pivotal for price action within the range. The level references lows ahead of the retail sales number, and a break below would likely target the 200 DMA.
Positioning in the Euro as disclosed in the COT report shows a second consecutive weekly narrowing in the net short position. Non-commercials were reported to reduce their net short by $932mn for a total net short of $13.67bn for the week up to August 9. The Euro continues to be the largest net short position held among the majors.
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The single currency marked an increase against the US dollar on Friday. The pair gained 25 pips to close the session at 1.1161. In the short term the positive attitudes prevail and strong support is seen at 1.1100.