EUR/USD is making attempts to regain the lost double bottom line of 1.2750, and continues trading at lows last seen in November 2012. The strength of the dollar is certainly the main theme, but European fundamentals cannot really help. In the last day of this exciting week, we have the final release of US GDP, among other events.
Here’s a quick update on technicals, fundamentals and sentiment moving the pair.
- Asian session: The pair stabilized on low ground, below 1.2750..
- Current range: 1.27 to 1.2750.
Further levels in both directions:
- Below: 1.27 1.2660, 1.2620 and 1.2587.
- Above: 1.2750, 1.2820, 1.2870, 1.2920 and 1.2960.
- 1.27 is just a round number. 1.2660 is strong support – where the now broken uptrend began.
EUR/USD Fundamentals
- 6:00 German Import Prices. Exp. -0.2%. Actual -0.1%. Is the weaker euro already impacting import prices?
- 6:00 German GfK Consumer Climate. Exp. 8.5, actual 8.3 points.
- 12:30 US Final GDP. Exp. 4.6%.
- 13:55 US revised consumer sentiment. Exp. 85.1 points.
* All times are GMT.
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- Extended dollar rally: The US dollar takes only short pauses between its gains, that were most recently inspired by the preparation of Yellen to exit monetary stimulus. A fresh round of dollar buying hit weak currencies such as the kiwi as well as stronger ones such as the pound. This is the main driver for EUR/USD reaching a new low, breaking below the 1.2750 double bottom.
- Draghi ready to act: This is not news, but the comments about being ready to do more, especially after the poor TLTRO, just provided another reason for selling EUR/USD. It is unlikely that the ECB will announce big new measures next week, but more dovish words and more details about the ABS program are now expected.
- Unsurprising US data: After we had the strongest new home sales in 6 years, jobless claims and durable goods orders did not surprise. While Q2 is somewhat far in the past, the publication is set to have a strong impact.
- Weak German confidence: Germany’s No. 1 think tank reported the lowest business confidence since April 2013. This is the fifth consecutive fall and it joins the weak ZEW number. Also the “expectations” and the “current assessment” components are lower. On the other hand, PMIs were somewhat better: while both French PMIs point to a contraction, the composite outcome is better than expected. German data is decidedly mixed. France is in the limelight nowadays amid growing pressure to reform its economy, while it wants Germany to increase spending.
In our latest episode, we talk about Contango vs. Backwardation, Scottish reverberations and key US data:
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