Home EUR/USD Forecast Feb. 8-12 – Euro pressing on key 1.20 line
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EUR/USD Forecast Feb. 8-12 – Euro pressing on key 1.20 line

Kenny Fisher
Updated:

EUR/USD posted losses for a second straight month and briefly fell below the key 1.20 level. There are four events on the calendar. Here is an outlook at the highlights and an updated technical analysis for EUR/USD.

German consumer spending slumped as Retail Sales plunged 9.6% in December, much lower than the estimate of -2.0%. Eurozone retail sales bounced back with a gain of 2.0% after a reading of -6.1% beforehand. Final PMI reports for Germany and the eurozone indicated strong growth in manufacturing but pointed to contraction in the services sector.

Eurozone inflation was unexpectedly strong in January. Headline inflation rose to 0.9% while core CPI improved to 1.4%. German Factory Orders fell by 1.9%, its first decline in eight months.

In the US, ISM Manufacturing PMI dipped to 58.7, down from 60.7 beforehand. Still, this figure points to strong expansion, as manufacturing remains a bright spot in the US economy. The services sector grew for an eighth straight month in a row, as the ISM Services PMI improved to 58.7, up from 57.2 beforehand. This was the highest reading since February 2019.
U.S. Nonfarm Payrolls disappointed with a negligible gain of 49 thousand, which didn’t even reach the forecast of 85 thousand. Wage growth rose 0.2%, down from 0.8% beforehand. There was better news from the unemployment rate, which dropped from 6.7% to 6.3%, its lowest level since March.

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

  1. German Industrial Production: Monday, 7:00. Industrial Production in the eurozone’s largest economy fell to 0.9% in November. The downtrend is expected to continue, with a forecast of 0.1% for December.
  2. Sentix Investor Confidence: Monday, 9:30. Investor Confidence came in at 1.3 in January, ending a nasty streak of 10 successive declines. Another gain is expected for February, with a forecast of 4.1.
  3. German Final CPI: Wednesday, 7:00. Inflation has struggled but improved in December with a solid gain of 0.5%. The upward trend is expected to continue, with a street consensus of 0.8%.
  4. French Industrial Production: Wednesday, 7:45. Industrial Production sagged In November, with a reading of -0.8%. Analysts are expecting a strong rebound in December, with an estimate of 0.4%.

EUR/USD Technical analysis

Technical lines from top to bottom:

We start with resistance at 1.2317.

1.2250 has held in resistance since April 2018.

1.2126 is next.

1.2002 (mentioned last week) is protecting the symbolic 1.20 line.

1.1846 is an important monthly support line.

1.1667 is the final support level for now.

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I remain neutral on EUR/USD

The eurozone economy remains weak, and the Covid lockdowns are making economic conditions even worse. The Biden stimulus program is gathering steam, which could weigh on the US dollar.

Further reading:

Safe trading!

Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.

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