Browsing: EUR/USD Forecast

EUR/USD pushed close to the 1.20 level but was unable to consolidate and showed little movement over the week. There are seven events in the upcoming week, including PMIs. Here is an outlook at the highlights and an updated technical analysis for EUR/USD. 
The Eurozone current account surplus soared to EUR 20.7 billion, up from EUR 8.0 billion. Eurozone CPI was revised to 0.4%, up a notch from 0.3%. The core reading came in at 1.2%, confirming the initial read. German Manufacturing PMI improved from 52.2 to 53.3, while the eurozone index slowed from 52.7 to 51.7. In the services sector, German Services PMI dropped to 50.8, down sharply from 55.3. The eurozone PMI slipped to 50.1, down from 54.6.
In the US, the Philly Fed Manufacturing index slowed to 17.2, down from 24.1 beforehand Unemployment claims surprised by climbing to 1.1 million, above the estimate of 930 thousand. The Federal Reserve minutes were dovish. Members stated concern about the continuing adverse impact of Corvid-19 on the US economy. The minutes also reiterated a call from Fed Chair Jerome Powell on the need for a fiscal package from Congress to boost the struggling economy. The week ended with good news from the manufacturing sector, as Manufacturing PMI improved to 53.6, its highest level since February 2019.

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

  1. German GDP: Tuesday, 6:00. The German economy plunged 10.1 in the second quarter, reflective of the enormous damage caused by Covid-19. The final reading is expected to confirm the initial read.
  2. German Ifo Business Climate: Tuesday, 8:00. Business confidence has been moving higher and climbed from 86.2 to 90.5 in July. The upswing is expected to continue in August, with an estimate of 92.5.
  3. Monetary Data: Thursday, 8:00. M3 Money Supply accelerated for a sixth straight month, climbing to an annual growth rate of 9.2.% in June. This was up from 8.9% a month earlier. Private Loans remained pegged at 3.0% in June y/y. We will now receive data for July. Money Supply is projected to rise to 9.5% while Private Loans are expected to grow again by 3.0 percent.
  4. German GfK Consumer Climate: Friday, 6:00. Consumer confidence improved to -0.3, up from -9.6 beforehand. Will the indicator punch into positive territory in the upcoming release?
  5. French GDP: Friday, 6:45. The previous release of Q2 growth data was dismal, with a reading of -13.2%. This release will likely confirm the initial figure.
  6. French Consumer Spending: Friday, 6:45. Consumers in the second-largest economy in the euro-zone have increased their spending for two successive months. In June, the indicator gained 9.0%. We now await the July data.
  7. French CPI: Friday, 7:45. France saw an increase of 0.4% in prices in July, the first gain in three months. It is the last major country to report inflation figures before the all-European number is due. Will we see another gain in the upcoming release?
  • All times are GMT

EUR/USD Technical analysis

Technical lines from top to bottom:

We start with resistance at 1.2174.

This is followed by 1.2053.

1.1958 is protecting the symbolic 1.20 level.

1.1844 remains relevant.

1.1723 is the first support line.

1.1652 has held in support since late July.

1.1573 (mentioned last week) is next.

1.1470 has held since mid-March. It is the final support line for now.

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I am bullish on EUR/USD

The US dollar has struggled and the euro has taken advantage – last week was EUR/USD’s first losing week since June. Unless the US economy shows significant improvement, the euro could rebound against the dollar this week.

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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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