EUR/USD Outlook – November 2-6 2009

Posted on November 1, 2009 by Yohay
Filed Under EUR/USD Forecast | 9 Comments

Looking for the latest outlook, for the current week? Check out the section: EUR/USD Forecast.

The Euro had a bad week, losing ground that took a long time to conquer. A rate decision is the highlight of this week’s events. Here’s an outlook for this week’s events, and an updated technical analysis for EUR/USD.

EUR/USD chart with support and resistance lines marked on it.

eur-usd-chart

Last week’s good employment figures from Germany supported the Euro in the struggle with the dollar, after the initial panic. On the other hand,  retail sales hurt it. Apart from the rate decision, this week’s German Factory Orders will stand out. Let’s review the events:

  1. Final Manufacturing PMI: European Manufacturing PMI rose for the first time above the crucial 50 point line according the initial, flash release. This means that purchasing managers’ are expecting expansion in economic activity. The number is expected to be confirmed in the final release made on Monday at 9:00 GMT.
  2. Final Services PMI: Completing Monday’s release, the Final Services PMI is due on Wednesday at 9:00 GMT. This indicator has already been above 50 in the last month. According to the initial release, it has pushed forward to 52.3. This number is expected to be confirmed.
  3. PPI: Producer Price Index is negative, similar to the consumer’s price index (CPI). After a fall of 0.4% last month, a drop of 0.3% is predicted this time. Note that only a big surprise will impact the markets since Germany and France already released their PPI. Published on Wednesday at 10:00 GMT.
  4. Retail Sales: Also here, the release is after Germany and France. But since it happens less than three hours before the rate decision, it can be move the nervous markets. After 4 months of squeezing, retail sales are expected to grow by 0.3% this time. Published on Thursday at 10:00 GMT.
  5. Rate decision: Jean-Claude Trichet is expected to leave the European Minimum Bid Rate at 1%. Deflation in Europe is too strong to put pressure for a rate hike. The focus will be, as in previous months, on the words at the ECB Press Conference. This probably won’t include rate moves, but it will include the ECB’s view of the economy, and the recovery.
  6. German Factory Orders: Europe’s largest economy showed strong growth in factory orders in the past 4 months. Last months it was relatively modest – a rise of 1.4%. This time, it’s expected to rise by 1%. Published on Friday at 11:00 GMT.

This week also features a lot of major American releases, with the Non-Farm Payrolls being the climax on Friday. These will also impact EUR/USD strongly, as the positive GDP in the US moved the pair.

EUR/USD Technical Analysis

EUR/USD was the first pair to feel the fear. It took it below the support line of 1.4842. It didn’t recover.  It went as low as 1.4683, then recovered on the positive American GDP, but fell again to close at 1.4714.

1.4842 serves as a resistance line now. It’s clearly seen in recent trading, both from the upside and the downside. Looking further up, I’ve marked the high point of 1.5062 as the next resistance line. It didn’t appear in last week’s EUR/USD Outlook. Above that, 1.5144 capped the pair when it was going up last year.

Looking down, I’ve marked this week’s low of 1.4683 as a support line. It’s a minor one. Below, 1.4444 served as a resistance line for a very long time, and now works as a major support line.

I’m now neutral on the pair. As long as economic recovery was proceeding slowly, Europe’s steady progress seemed convincing enough. But when fear sweeps the markets, the European currency doesn’t have the fuel for an uphill run.

This popular pair receives many interesting articles on the web. Here are my favorites:

Further reading:

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    Comments

    9 Responses to “EUR/USD Outlook – November 2-6 2009”

    1. AUD/USD Forecast - November 2-6 | Forex Crunch on November 1st, 2009 12:04 am

      [...] For the EUR/USD check out the EUR/USD Forecast. [...]

    2. Forex Forecast - November 2-6 2009 | Forex Crunch on November 1st, 2009 6:15 am

      [...] For the Euro, check out the EUR/USD Forecast. [...]

    3. USD/CAD Forecast - November 2-6 | Forex Crunch on November 1st, 2009 6:20 am

      [...] For the EUR/USD check out the EUR/USD Forecast. [...]

    4. GBP/USD Forecast - November 2-6 | Forex Crunch on November 1st, 2009 6:32 pm

      [...] For the Euro, check out the EUR/USD Forecast. [...]

    5. Forex Daily Outlook – November 2nd 2009 | Forex Crunch on November 2nd, 2009 9:46 am

      [...] In Europe, Final Manufacturing PMI is expected to exceed the initial reading and rise to 50.9. EUR/USD trades now at 1.4747, with last week’s range. For more on the Euro, read the EUR/USD Forecast. [...]

    6. EUR/USD isn’t convinced by good figures | Forex Crunch on November 2nd, 2009 6:06 pm

      [...] the EUR/USD Forecast for more on the Euro’s week. Enjoyed the post? You may want to subscribe to the RSS feed. [...]

    7. Forex Daily Outlook – November 3rd 2009 | Forex Crunch on November 3rd, 2009 9:05 am

      [...] Axel Weber, head of the German Bundesbank, will be speaking today. HE is one of the influential members of the ECB, and his words can move the markets. Read more on the Euro’s upcoming events in the EUR/USD Forecast. [...]

    8. Forex Daily Outlook – November 6th 2009 | Forex Crunch on November 6th, 2009 9:27 am

      [...] In Europe, France will release its Trade Balance, which is expected to show a smaller deficit. Later, German Factory Orders are expected to continue marching forward, this time by 1%. For more on the Euro, read the EUR/USD Forecast. [...]

    9. EUR/USD Forecast November 9-13 | Forex Crunch on November 8th, 2009 6:12 pm

      [...] resistance line of 1.4842, that was mentioned in last week’s EUR/USD outlook was eaten from all directions, and doesn’t appear in the [...]

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