Search ForexCrunch

EUR/USD  traded somewhat lower but never went too far. GDP releases are the main events for the upcoming week.  Here is an outlook for  the highlights of this week and an updated technical analysis for EUR/USD.

Euro-zone data was more or less in line with expectations. Retail sales disappointed but German factory orders beat expectations. Greek negotiations are moving along quietly. Perhaps this is a good sign, but it’s hard to see how the parties will overcome the debt restructuring topic. In the US,  data was OK, with NFP coming in slightly below expectations, triggering a mixed market reaction  and keeping markets divided about the prospects of a  rate hike in September.

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

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

EURUSD Technical analysis August 10 14 2015 euro dollar fundamental outllook sentiment for currency trading

  1. Sentix Investor Confidence: This  survey of around 2800  analysts and investors has surprised with a rise to 18.5 points back in July, recovering from lower levels. It will be interesting to see if optimism, as reflected in the positive figure, persists. Expectations stand on 20.2 points.
  2. German ZEW Economic Sentiment: Tuesday, 9:00. This early survey has a  significant impact on the euro. In the past few months, the index has gone south and fell short of expectations, hitting a low of 29.7 points in July. The all European number stands at 42.7.  Will the current relief in the Greek crisis  support a recovery? A small rise to 31.1 points is on the cards for the main German number and 43.9 on the European figure.
  3. Industrial Production: Wednesday, 9:00. The figure is  released after both Germany and France have released their numbers. Nevertheless, we can expect some impact on the common currency. A drop of 0.4% was recorded in May and perhaps we will see a rebound now: +0.2%.
  4. German Final CPI: Thursday, 6:00. According to the preliminary read for July, prices advanced by 0.2% m/m. This rise will likely be confirmed in the final read.
  5. French CPI: Thursday, 6:45. The continent’s second largest economy has seen prices dip by 0.1% in June. A fall of 0.4% is on the cards.  The figure feeds into the final CPI read for the euro-area.
  6. ECB Monetary Policy Meeting Accounts: Thursday, 11:30. In the recent ECB decision, Draghi and co. left policy unchanged and did not release any hint of an early end to QE. We will  get to  hear some of the debates around the table in Frankfurt. The interesting parts will be related to policy around Greece. In that presser, Draghi said that debt relief is “not controversial” and also said they raised Greek ELA.
  7. GDP releases: Friday morning: France at 5:30, Germany at 6:00, Italy at 8:00 and the full euro-zone data at 9:00. The French economy grew by a strong 0.6% in Q1 after a few anemic quarters and the strongest since 2011. A slower growth rate of 0.2% is now expected. Germany saw only 0.3% in growth during Q1, down from a strong ending to 2014. An expansion of 0.5% is on the cards. Italy fully emerged from the recession with +0.3% (the same expected now) and the euro-zone as a whole enjoyed a growth rate of 0.4% with a repeat on the cards. We already know that  the Spanish economy expanded rapidly in Q2. These are the preliminary numbers, but they don’t change too much in the final read.
  8. French Non-Farm Payrolls: Friday, 6:45.  The number of French workers remained flat in the past two quarters. In the preliminary read for Q2 2015, we could see a gain: +0.1%.
  9. Final CPI: Friday, 9:00. The initial read showed ongoing subdued inflation of only 0.2% y/y. However, core CPI continued advancing and reached 1%. These  numbers will likely be confirmed in the final read for July.

* All times are GMT

EUR/USD Technical Analysis

The pair opened  in range but later fell to a lower range. However, it escaped the  important 1.0815 and managed to recover.

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

Technical lines from top to bottom:

The historic line of 1.1373 (from November 2003) still  has a role as resistance. 1.1290, which was a peak in April and support in February is significant resistance.

1.1190, just below the round number of 1.12, proved its strength as a double top in June 2015. It is followed by a low seen in  January  of 1.1113 which is nearly 0.90 on USD/EUR.

1.1050 returns to the chart after serving as a stepping stone for the pair to rise to higher ground. 1.0950 is a pivotal line in the range.

1.0865 provided some support in late May and is weak support before a stronger line: 1.0815 which worked in both directions is the  low of May and important support.

The next line is  1.0760, which was the low point in both July and August 2003. 1.0715 joins the chart after temporarily capping the pair in April 2015.

1.0660 worked nicely as support in April 2015.  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.

I am neutral  on  EUR/USD

Improvements in the euro-zone economies could balance the strength coming from the US this week. In the bigger picture, the trend remains to the downside and it could resume when Greek talks approach the deadline in the following week.

In our latest podcast, we ask: Will they or won’t they? We talk about the  Fed and also falling oil and silver.

Follow us on Stitcher.

If you are interested in a different way of trading currencies, check out the  weekly binary options setups, including EUR/USD and more.

Further reading: