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EUR/USD  is trading quietly, continuing the trend which  we’ve seen since last week. In the European session on Tuesday, the pair is trading in the 1.3270  range,  and has been unable to push into 1.33 territory.  After a break on Monday, there  is a full schedule of  Eurozone releases on Tuesday. German Consumer Climate edged upwards and posted a multi-year high. In Spain, Flash GDP  posted a slight decline, but still improved to a seven-month high.  In the US, today’s major  event is CB Consumer Confidence. The markets are expecting  a strong release from the key indicator.  Monday had just one release, as US Pending Home  Sales came in at -0.4%. This was not an impressive reading, but nonetheless managed to beat the estimate of -1.1.%.

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

  • Asian session: Euro/dollar  edged lower, touching a low of 1.3248 late in the session. The pair consolidated at 1.3258. Euro/dollar has edged upwards in the European session.

Current range: 1.3255 to 1.3300.

Further levels in both directions:   EUR USD Daily Forecast July 30th

  • Below: 1.3255, 1.3175, 1.31, 1.3050, 1.30, 1.2940, 1.2890 and 1.2840, 1.28 and 1.2750.
  • Above:    1.33, 1.3350, 1.34, and 1.3520.
  • 1.33 is providing weak resistance.  1.3350 is next.
  • On the downside, 1.3255  is under pressure. 1.3175 is stronger.

EUR/USD Fundamentals

  • 6:00 GfK German Consumer Climate, exp. 6.9, actual 7.0 points.
  • Tentative:  German Preliminary CPI, exp. 0.3%.
  • 7:00 Spanish Flash GDP, exp. -0.1%, actual -0.1%.
  • 8:10 Eurozone Retail PMI.
  • Tentative: Italian 10-year Bond Auction.
  • 13:00 US S&P/CS Composite-20 HPI, exp. 12.4%.
  • 14:00 US CB Consumer Confidence, exp., 81.1 points.

For more events and lines, see the  Euro to dollar forecast.

EUR/USD Sentiment

  • German consumer confidence remains high: GFK German Consumer Climate looked good on Tuesday, edging from 6.9 to 7.0 points. This figure was the best we’ve since August 2007. The markets will get a good look at the health of the German economy, as German Preliminary CPI is released later on Tuesday, while Retail Sales will be published on Wednesday. German releases have been a mix recently, and with general elections in Germany in September, every economic release has added significance and will be under the microscope as the election heats up.
  • Spanish GDP points higher:  Is the Spanish economy improving? Government officials insist that it is, but the proof of course, is in the pudding. In fact, we are seeing better numbers out of the Eurozone’s fourth largest economy. In June, the unemployment rate dropped from 27.2% to 26.3%.  This marked the first monthly decline since July 2011, when the unemployment rate was around 21%.  On Tuesday, Flash GDP was released. The key indicator posted a modest decline of -0.1% for Q1.  This was the best result since late 2011. If the next  releases points to growth, this would be excellent news for  the long-suffering  economy and could bolster the euro as well.
  • US Consumer Sentiment Climbs: It may not have been  the largest of  gains, but the increase posted by the UoM Consumer Sentiment on Friday was nonetheless significant. The indicator rose from 84.1 to 85.1 points, its highest level since July 2007. Clearly, US consumers feel better about the economy, and this should lead to  improvement in a wide range of sectors, such as retail sales and employment. We’ll have to wait for releases from these and other sectors to see if greater optimism is indeed  leading to stronger economic activity.
  • Euro  consolidates strong gains: The euro is up about one cent since Thursday, and is within striking distance of the 1.33 line. The continental currency took advantage of weak employment and manufacturing data out of the US, and  EUR/USD is  now perched at 5-week highs.  The US started the week with  unimpressive housing  numbers, and if  US releases don’t show  some  improvement, there is room for  the euro  to take advantage and move even higher.
  • US housing  numbers point up & down: The US housing sector is a key component of the economy, and strong housing indicators are bullish for the dollar. On Monday, Pending Home Sales disappointed, declining by 0.4%. This beat the estimate of -1.1%, but was a disappointment after an excellent gain in the previous release. Last week’s housing releases were inconclusive, as two key housing indicators pointed in opposite directions.  Existing home sales disappointed with a drop, while  New Home Sales had its best showing in five years. So where do we stand?  With housing data remaining inconclusive, we’ll have to wait for the August releases – hopefully these will give us a clearer picture of the health of the housing sector.