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EUR/USD July 21 – Attempts a recovery in low range

EUR/USD  starts the new trading week with a recovery in the low range. The dip below 1.35 seen on Friday proved to be a false one. The worsening situation in Gaza and the rising tensions about the plane crash in Ukraine continue to dominate the  headlines, especially as the calendar seems thin. Can the pair return to the previous, higher range?

 Here is a quick update on what’s moving the pair.

  • EUR/USD  eventually made a move higher but met resistance at 1.3550.
  • Current range:  1.35 to 1.3550.

Further levels in both directions:

EURUSD July 21 2014 technical analysis fundamental outlook and sentiment

  • Below: 1.35, 1.3450, 1.34, 1.3375 and 1.33.
  • Above: 1.3550, 1.3585, 1.3610, 1.3650 and 1.3677.
  • 1.35 is where Draghi sent the pair, and it is critical support.
  • 1.3550  remains an immediate resistance line. 1.3585 follows.

EUR/USD Fundamentals

  • 6:00  German PPI. Exp. +0.1%,  actual 0%. Another sign of weak inflation.
  • 10:00 German Bundesbank report.

*All times are GMT.

For more events and lines, see the  Euro to dollar  forecast.

EUR/USD Sentiment

  • Escalation in Ukraine: The blame game around the downing of MH17 continues with the Ukrainians and the Russians blaming each other. In addition, there are accusations of tampering with the evidence and looting of the belongings of the victims. This leaves a tense atmosphere and we could see more sanctions coming form the West on Russia, something that could hurt the European economies.
  • Deadly day in Gaza: The fighting in Gaza intensified on Sunday with higher than normal casualties on both sides. As long as oil production in other countries is not disturbed, there will be no impact on the markets. The deadly day could accelerate efforts to broker a ceasefire.
  • Mixed US data:  On the job front, things are improving quite nicely, with another drop in jobless claims and continuing claims. However, big  disappointments came from the housing sector  with significant drops in both building permits and housing starts. The mixed picture was also reflected in a  leap in the Philly figure  with unexciting retail sales. We will get another glimpse of the consumer now.
  • Yellen  hints rate hike likely in 2015:  Federal Reserve Chair Janet Yellen concluded  two days of  testimony on Capitol Hill on Wednesday, testifying before the House Financial Services  Committee.  Yellen declined to directly answer questions about  when the Fed would begin to raise rates, but she did acknowledge that  most economists expect the Fed to  make a move  in the third quarter of 2015. The note about “stretched valuations” in some sectors of the equity markets caught investors’ attention and could serve as a hint that the Fed is set to tighten sooner.  The dollar eventually reacted positively.
  • Euro data remains mediocre:  Final euro-zone CPI for June  matched the early print at 0.5%  and shows that inflation remains at rock bottom levels. Together with a  disappointing ZEW figure  from Germany, the recovery remains weak and fragile,. These weak numbers have further raised concerns about the health of the German and Eurozone economies, and the euro could lose more ground.

More:  EUR/USD in downtrend as USD is on the move – Elliott Wave Analysis

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.