EUR/USD is trading above 1.36, but remains in the same old trading range. The various German states began releasing their initial CPI estimates and they all point to stronger month over month gains as well as year over year gains. This is a change after many months of deterioration. Will this suffice to ensure a stronger close of the last full week of the quarter?
Here is a quick update on what’s moving the pair.
- EUR/USD was stable in the Asian session and has edged lower in European trading.
- Current range: 1.3585 to 1.3650.
Further levels in both directions:
- Below: 1.3585, 1.3550, 1.35, 1.3450, and 1.34.
- Above: 1.3650, 1.3677, 1.37, 1.3740, 1.3785, 1.3830, 1.3865 and 1.3905.
- 1.3585 is an immediate support line, serving as a perfect separator of ranges.
- 1.3650 is the next line of resistance. 1.3677 is stronger.
EUR/USD Fundamentals
- 6:00 German Import Prices. Exp. +0.2%, actual 0%.
- 6:45 French Consumer Spending. Exp. +0.3%, actual 1%.
- 7:00 Spanish CPI. Exp. +0.3%, actual +0.1%.
- 12:00 German CPI. Exp. +0.2% m/m, +1% y/y, HICP +0.7%
- 13:55 US Revised consumer sentiment. Exp. 82.2 points.
*All times are GMT.
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- German inflation turned a corner?: Towards the all-German release at 12:00 GMT, some German states have already posted data and it looks stronger: Bavaria posted +0.7% y/y after 0.6% in May. Brandenburg +0.9% vs. +0.8% and other states also posted gains. This implies a stronger CPI this month, and in turn it could lead to a stronger all-European CPI on Monday and a calmer ECB on Thursday.
- Yellen’s inflation number advances: In the US, the inflation focus is now firmer on the Core PCE Price Index. It has advanced to 1.5% y/y, still below the Fed’s 2% target. Is it on the path to reaching the target, or not? This is a question causing many analysts to scratch their heads Yellen dismissed regular CPI and Core CPI as “noisy”, making this indicator more important.
- US economy – past vs. present: US Final GDP in Q1 was much worse than expected. The markets were braced for a decline of 1.8%, but the indicator shocked with a much sharper drop of 2.9%. This is really huge contraction that puts the growth forecast of 2% in doubt. On the other hand, more recent figures already look much better: this includes strong sales of homes, consumer confidence and also core durable goods orders..
- Eurozone economies struggle: Eurozone PMIs fell below expectations, especially in France. The forward looking indices are worrying. Yet also in Germany, business confidence slumps. Even if growth is still here, it is extremely sluggish.
Forex Analysis: EUR/USD Rebounds within Bearish Retracement
Next week is huge, with the ECB and NFP at the same time.
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