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EUR/USD Forecast, Majors

EUR/USD Forecast Apr. 6-10

EUR/USD  began the new quarter with a slide but emerged as a winner, mostly due to USD weakness. The upcoming week features inflation data from Germany and some more PMIs.  Here is an outlook for  the highlights of this week and an updated technical analysis for EUR/USD.

The important euro-zone data beat expectations, with  a squeeze in deflation and upbeat German job data. This didn’t help the  euro initially as the end-of-quarter adjustments  favored the greenback. In the US, a week that began with some  positive figures ended with a very disappointing jobs report, that cast doubts on the next moves of the Fed. What’s ahead after Easter?

[do action=”autoupdate” tag=”EURUSDUpdate”/]

EUR/USD daily chart  with support and resistance lines on it. Click to enlarge:

EURUSD April 6 10 2015 technical analysis fundamental outlook forex trading euro dollar

  1. Spanish Unemployment Change: Monday, 7:00. While many members in the old continent still observe Easter, the zone’s fourth largest country releases the monthly change in the number of the jobless. After a slide of 13.5K in February, a bigger drop of 18.3K is expected now. Spain has one of the highest levels of unemployment.
  2. Services PMIs: Tuesday: Spain at 7:15, Italy at 7:45 and the final euro-zone figure for March at 8:00. Markit’s  purchasing managers’ indices for services sector mostly showed growth in February, and this is set to continue with scores above 50 points once again. Spain is expected to see its strong growth continue with a rise from 56.2 to 56.5. Italian services are predicted to pick up with a rise from 50 to 51.1 points and the final services PMI for the whole euro-zone is likely to confirm the initial  positive read of 54.3 points.
  3. Sentix Investor Confidence: Tuesday, 8:30. This wide survey of 2800 analysts and investors beat expectations for 4 consecutive months. After hitting 18.6 points in March, a score of 20.9 is predicted for April.
  4. PPI: Tuesday, 9:00. Purchasing prices fell sharply in  January: 0.9%. A very small bounce of +0.1% is on the cards for February, a month that saw oil prices stabilize.
  5. German Factory Orders: Wednesday, 6:00. While this is quite a volatile number, it still has a significant impact. Orders in Europe’s No. 1 economy fell by 3.9% in January, and have likely advanced 1.5% in February.
  6. French Trade Balance: Wednesday, 6:45. The continent’s second largest economy suffers from trade deficits for quite a long time. However, these are shrinking in recent months together with the weaker euro. For February, a deficit of 3.8 billion euros is on the cards, a similar level to January.
  7. Retail PMI: Wednesday, 8:10. This indicator of the retail sector refuses to return to growth territory. It stood on 46.4 points in  February, and isn’t likely to  top the 50 point mark this time.
  8. Retail Sales: Wednesday, 9:00. Even though German sales numbers are already published, this release tends to surprise and move markets. We had three  4 months of  growth in sales. After +1.1% in January, a small slide of 0.1% is on the cards for February.
  9. Greek payment to IMF due:  Thursday. Greece is in a shortage of cash and is still at odds with its creditors. As time passes by since the February 20th agreement, Greece still has to pay its debt. At the moment, there is optimism that it will fulfill its obligations and the Greek crisis is  still on the sidelines. However, if it misses its payment, the move would mark a dangerous turn of events.
  10. German Industrial Production: Thursday, 6:00.  This indicator is somewhat less  volatile than factory orders. After a rise of 0.6% in January, a slower growth rate of 0.1% is expected for February in the euro-zone’s locomotive.
  11. German Trade Balance: Thursday, 6:00. Germany traditionally enjoys a trade surplus and this has been  floating around 20 billion euros lately. After +19.7 billion in January, a positive number of 20.3 is forecast for February.
  12. French Industrial Production: Friday, 6:45.  The second core country also enjoyed growth in industrial output in January: +0.4%. A  minimal slide of 0.1% is expected for February.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar  started off the week with a slide and bottomed out just above  1.0710, a line that joins our chart now. It then made a complete comeback,  capped initially by 1.0910 (mentioned last week) but continued further above to close to 1.0963.

Live chart of EUR/USD: [do action=”tradingviews” pair=”EURUSD” interval=”60″/]

Technical lines from top to bottom:

We start from higher ground this time:  1..1373 was the November 2003 level and it looms above. 1.1290 was a pivotal line back in January 2015 and is resistance.

The round number of 1.12 is clear resistance. It is followed by a low seen in  January  of 1.1113 which is nearly 0.90 on USD/EUR.

1.1050 was  a high point in March 2015 and is another line of resistance before  the round level 1.10. This is still a battle line.

The next line was minor support  back in  October 1999: 1.0910. It was resistance back then and was tested once again in March 2015.  This is followed by which worked in both directions.

The next line is  1.0760, which was the low point in both July and August 2003. There isn’t much support between here and  1.0615, which worked in both directions during March 2015 and is better at support.

Another minor line is 1.0550, for  a role as support in the same period of time.  The very round level of 1.05 served as support during 2003.

The lowest level in over 12 years is 1.0462 and this makes it critical support.

From here on, we are at levels last seen over a decade ago.  We have some support at 1.0360: this was the low point in January 2003.  Further down, 1.0170 worked as resistance back in November 2012. It is close to the swing high of 1.0208 seen in July of that year.

Below this point we have the very obvious level of  1 – EUR/USD parity, which is already eyed  by more  and more analysts

I am neutral  on  EUR/USD

The recent recovery of the pair was fueled by USD weakness, but it fails to convince as a real change of course. The pair is still in correction mode and seems to have found a range to trade in: between 1.0710 and 1.1050. While the  greenback is less attractive, what will you buy?  The euro is not the best candidate. The recent green sprouts in the old continent are still  fragile. Draghi and co. will continue printing money to give the recovery a better footing, and this is not an easy feat.

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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.