EUR/USD daily chart with support and resistance lines on it. Click to enlarge:
- Manufacturing PMIs: Monday, 7:15 for Spain, 7:45 for Italy, final French figure at 7:50, final German one at 7:55, and final euro-zone number at 8:00. Spain and Italy’s manufacturing sector remained in contraction in June, with readings of 49.0 and 49.7, respectively. However, both PMIs are expected to push above the 50-mark, which separates contraction from expansion. Initial German and eurozone PMIs for June also improved, with releases of 50.0 and 51.1, respectively. The French initial read of 52.0 was unchanged from the May release. The final releases for France, Germany and the eurozone are expected to confirm the initial readings.
- Spanish Unemployment Change: Tuesday, 7:00. Spain’s unemployment rolls fell to 5.1 thousand in June, but this was nowhere near the estimate of -113.0 thousand. We now await the July data.
- Services PMIs: Wednesday, 7:15 for Spain, 7:45 for Italy, final French figure at 7:50, final German one at 7:55, and final euro-zone number at 8:00. The services sector showed expansion across the board in July. Germany and the eurozone both improved, with readings of 56.7 and 55.1, respectively. Spain and Italy are projected to come in slightly above the 50-level, which separates expansion from contraction. The final reads for France, Germany and the eurozone are expected to confirm the initial readings.
- Retail Sales: Wednesday, 9:00. Eurozone retail sales are the primary gauge of consumer spending. After two straight declines in double digits, retail sales shot up 17.8 percent in May. The forecast for June stands at 6.5%.
- German Factory Orders: Thursday, 6:00. Factory orders rebounded in May, with a gain of 10.4%, after a plunge of 25.8% beforehand. Another strong gain is forecast for June, with an estimate of 11.0%.
- German Industrial Production: Friday, 6:00. Industrial production also recovered in May, with gains of 7.8%. This followed a sharp decline of 17.9% beforehand. The upswing is expected to continue, with a gain of 8.3%.
EUR/USD Technical analysis
Technical lines from top to bottom:
We start with resistance at 1.2004, just above the psychologically important 1.20 level.
1.1930 is next.
1.1850 has switched to a support role following strong gains by EUR/USD last week.
1.1725 remains relevant. It is the first line of support.
1.1650 is the next support level.
1.1573 (mentioned last week) has some breathing room in support.
1.1470 has held since mid-March. It is the final support line for now.
I remain bullish on EUR/USD
The US dollar continues to retreat. Last week, EUR/USD climbed to its highest level since May 2018. With many parts of the US struggling with Covid-19, the dollar’s woes could continue this week.
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