Browsing: EUR/USD Forecast

EUR/USD continues to yawn, as the pair showed limited movement for a fourth successive week. There are five events in the upcoming week. Here is an outlook at the highlights and an updated technical analysis for EUR/USD. 
German inflation improved to 0.6%, after a decline of 0.1% beforehand. In the eurozone, inflation rose to 0.3%, compared to 0.1% a month earlier. The core read was much stronger, at 0.8%. German retail sales jumped 13.9% in May, after back-to-back declines. Germany and eurozone manufacturing PMIs were up slightly in June, but remain in the mid-40s, which indicates contraction. France was a bright spot, with a reading of 52.3, which points to expansion. It was a similar story in services, as Germany and the eurozone remained in the mid-40s, while France improved to 50.7. This was just above the 50-level, which separates contraction from expansion.
In the U.S., manufacturing improved sharply, as Manufacturing PMI climbed from 39.8 to 49.6 points. The estimate stood at 50.0, which separates contraction from expansion. Durable goods orders sparkled in May. The headline figure climbed 4.0%, rebounding after a decline of 7.4 percent. The core reading surged 15.8%, rebounding from a read of -17.2% beforehand. The Conference Board consumer confidence index jumped from 85.9 to 98.1 and easily beat the estimate of 91.6 points. Nonfarm payrolls shot up in June, with a gain of 4.80 million. This comes after a May release of 2.509 million. Unemployment claims dropped from 1.48 million to 1.42 million, higher than the estimate of 1.35 million.

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

  1. German Factory Orders: Monday, 6:00. Factory orders plunged in April, with a decline of 25.8%. This follows a drop of 15.6%. Better news is expected in May, with a forecast of 15.1 percent.
  2.  Sentix Investor Confidence: Monday, 8:30. Investor confidence has been in deep-freeze in recent months. The indicator improved to -24.8 points in June, up from -41.8 beforehand. The forecast for July stands at -10.8 points.
  3. Retail Sales: Monday, 9:00. Retail sales fell 11.7% in April, after a drop of 11.2% in March. However, analysts expect a strong rebound in May, with an estimate of 15.0 percent.
  4. German Industrial Production: Tuesday, 6:00. The manufacturing sector has been hit hard by the coronavirus. Industrial production plunged 17.9% in April, after a drop of 9.2% beforehand. May is expected to bring better news, with an estimate of 10.1 percent.
  5. French Industrial Production: Friday, 6:45. The second-largest economy in the eurozone has also seen a sharp contraction in manufacturing. The indicator fell 20.1% in April, but is projected to rebound in May, with a forecast of 15.2 percent.

EUR/USD Technical analysis

Technical lines from top to bottom:

We start with resistance at 1.1515.

1.1435 was a low point at the beginning of February.

1.1280 is next.

1.1215 is an immediate support level. 1.1119 is next.

1.1025 (mentioned last week) has provided support since late May.

1.0920 is the final support level for now.

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I remain neutral on EUR/USD

The euro continues to show limited movement. The eurozone continues to exhibit weak economic conditions, but the euro has been able to hold its own against the dollar and this trend could continue this week.

Further reading:

    • GBP/USD forecast – Pound/dollar predictions
    • USD/JPY forecast – analysis for dollar/yen
    • AUD/USD forecast – the outlook for the Aussie dollar.
    • USD/CAD forecast – Canadian dollar predictions
    • Forex weekly forecast – Outlook for the major events of the week                                                                                                                                                                                                                 Safe Trading!

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EUR/USD Forecast, Technical Analysis, Outlook ► preview of the major events that move Euro/Dollar during the week. Here are some general data. Scroll down for the latest EUR/USD forecast.

EUR/USD characteristics

Euro/dollar is the world’s most popular currency pair for both retail and institutional traders. 19 European countries that vary quite a bit from each other share the single currency. The key countries are Germany, France, Italy and Spain. The US dollar is the reserve currency of the world.

A wide trade surplus, originating mostly from German exports, means that funds are flowing into the euro area. When markets are calm, this influx pushes the common currency higher. However, the eurozone has its share of economic and political issues and speculation takes its toll.

The euro debt crisis engulfed Greece, Portugal, Ireland, Italy, and Spain. While the worst may be behind us, it is always looming. The leadership of the European Central Bank and President Mario Draghi helped stabilize and even save the euro. His “whatever it takes” speech in July 2012″ was a turning point. The diverse countries are linked by a monetary union but not a fiscal one, and this remains the Achilles heel.

EUR//USD trading is often choppy, especially when it is confined to narrow ranges. When the pair is in trend, past technical lines, even those from 2003, are respected quite nicely. €/$ has a “good memory”.

EUR/USD recent moves

The euro-zone economies are growing at a robust pace in 2017. Unemployment is falling and even core inflation is finally rising albeit temporarily All this has led to optimism that sent the euro higher.

The ECB will halve bond-buys to 30 billion euros from January 2018. However, it left the door open to extending the QE program beyond September, and this hurt the euro. A weaker euro makes exports more attractive and pushes imported inflation higher. Draghi is happy with growth but worried about inflation.

The political uncertainty in Germany is becoming an issue after inconclusive elections in September. A fresh round of elections joins the crisis in Catalonia and the political instability in Italy.

In America, hopes for fiscal stimulus faded early in the year, but are now on the rise again, with Trump’s tax plan. The Federal Reserve has maintained its plan for three rates hikes in 2017 despite lower US inflation.

Latest weekly EUR/USD forecast

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