Eur/usd - page 270
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
EUR/USD dropped dramatically after Yellen speech now price is testing 1.1010.
EU Preview: A Deal for Greece? Maybe.
Patience is clearly running out.
Claims and counterclaims, optimistic and pessimistic expectations...politicians, experts and journalists alike have expressed their views, hopes and ideas about possible outcomes over the weeks that inflated into months following the January 25 parliamentary election in Greece that brought a radical change in political environment in the country.
Every single week since February 20, a deal between Athens and its international creditors, the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) looked imminent. Only to end up in a trash can.
So, will there be a deal next week? Maybe.
At least when judging from declarations of politicians and their aides.
Greece's government spokesman Gabriel Sakellaridis said after the Merkel-Hollande-Tsipras meeting in Riga that Athens expects to reach a deal with its creditors in the next 10 days.
“We think conditions have matured (enough) to progress further and in the next 10 days, in May, for the deal to be sealed,” he said.
German Chancellor Angela Merkel didn't indicate any real breakthrough in the meeting with French President Francois Hollande and Greek Prime Minister Alexis Tsipras.
“It was a very friendly, constructive exchange, but it’s also clear that there must be more work with the three institutions. There is a lot to do,” she told reporters on Friday morning.
"France and Germany have offered Greece and the Greek Prime Minister that whenever there are questions to be discussed, whenever there is help to be given, to do so but the conclusion needs to be found with the three institutions and there needs to be very, very intensive work.”
European Commission President Jean-Claude Juncker clearly thinks that Greece's exit from the euro zone is politically not acceptable. He told German news magazine Wirtschaftswoche: "(The euro is) not just about monetary policy and economic reasons, but also the dignity of the Greeks.”
IMF Managing Director Christine Lagarde: "We have constant discussions, and are making some progress in those negotiations with the Greek authorities ... but it’s clearly a difficult situation, and one where we all have to be mindful of the economic success, the financial stability, but also the accountability for the commitments that have been made with the international community."
"If one set of measures is not adjustable to a new political paradigm, fine," Lagarde said, "but something else has to be substituted for it," she added.
And last, but definitely not least, Germany's Finance Minister Wolfgang Schaeuble: "I can understand the public speculation about political solutions; but they are not justified by anything in their substance."
Debt trap
However, even if there finally is a deal, or some kind of a deal, there is no guarantee that problems with the Greek debt will somehow disappear from the radars and newspaper pages and web sites, as it is ingrained in a flawed design of the euro zone economic and financial model.
"As an economic model, the Eurozone looks dysfunctional and defunct in the modern age," Neil MacKinnon at VTB Capital Research wrote in a note to clients on Friday.
"The viability of monetary union in the longer term requires at the very least the complement of fiscal union and banking union. Without that, the design mechanism of monetary union is flawed and, like similar monetary arrangements in history, an adjustment mechanism that puts the burden of adjustment on to deficit economies, rather than the surplus economy, will eventually suffer an existential crisis. To some extent, the current Greek situation highlights these issues," he argues, recalling the historical facts that contributed to current debt problems.
"The so-called bailouts of Greece, Ireland and Portugal were really bailouts for German and French banks, which took the opportunity of a new currency and the reduction in currency risk as national currencies disappeared to expand their borrowing in the periphery. Capital flowed from north to south in a form of 'vendor financing' and the periphery used the capital to expand consumption and debt. When the bubble burst, the German and French banks were protected."
Meanwhile, for many countries, including Greece, their financial and economic problems only multiplied and debts compounded.
"The debtor countries then faced a severe ‘internal devaluation’ and a tight fiscal adjustment which has shrunk the size of their economies and pushed unemployment higher. For Greece, such policies have also pushed government debt higher," MacKinnon writes, warning that insisting on carrying on the current "rescue" program is not going to solve the fundamental problems.
"The insistence on targeting a primary budget surplus means that economic growth can never be strong enough to reduce the debt burden. This is a debt trap. Even if there is last minute deal between the Greek government and its official creditors, the problem of debt sustainability has not gone away."
read more
EUR/USD: Euro Dives on ECB's QE Plans, Divergent Policies
The shared common European currency was on a downward trajectory over the past week, as the European Central Bank officials announced they would "frontload" the central bank's asset purchases in May and June. The divergence in monetary policies on both sides of the Atlantic continued to play a key role as well.
At the beginning of the week the currency traded around $1.1400, swinging lower from the highs seen over the previous week and analysts said the Greek debt drama would be the primary focus in the days ahead.
On Tuesday, the 19-nation bloc currency received an unexpected blow, as one of the members of the European Central Bank announced the bank's plans for the coming months, as far as its bond-buying program is concerned.
ECB Executive Board member, Benoit Coeure, said the central bank intends to increase its purchases of euro area assets in May and June ahead of an expected low-liquidity period in the summer.
"We are also aware of seasonal patterns in fixed-income market activity with the traditional holiday period from mid-July to August characterized by notably lower market liquidity,” Coeure said.
“If need be, the frontloading may be complemented by some backloading in September when market liquidity is expected to improve again. The slightly higher purchase volume that market analysts may observe in the coming weeks is therefore unrelated to the recent episode of market volatility," he added.
The announcement immediately had an impact on the euro, which came under pressure and was sold off heavily, reaching its intraday low, dropping around 140 pips, or more than 1%, from the intraday highs around $1.1320 to $1.1175, the lowest since May 13.
The ZEW Economic Sentiment Index failed to provide much-needed support, by showing that business morale in Germany worsened further in May, with the respective gauge falling to its 5-month low.
The index evaluating the economic outlook of about 350 respondents for the six months ahead, fell to 41.9 in the fifth month of the year, down from the previous month when the reading stood at 53.3 points.
To cap it all, the currency cross dived deep below the $1.12 mark after upbeat US housing figures that boosted the US dollar.
Housing starts in the US rose 1,135K, well above estimates of 1,015K and also higher than the previous month's 944K. This represents a monthly change of 20.2%. Building permits printed 1,143K and beat analysts expectations of a 1,064K print, improving 10.1% month-on-month.
One of the most important events of the week for the currency pair was the release of the Federal Open Market Committee (FOMC) minutes, which were expected to provide further power for dollar bulls.
In an initial reaction, the highly awaited downward trend really occurred, however, the pair later erased some of the losses, climbing back over the $1.11 mark.
The minutes from the latest meeting of Fed governors revealed that a rate hike is doubtful at the next FOMC meeting in June.
The document said that many participants thought it was unlikely that "data available in June would provide sufficient confirmation that the conditions for raising the target range for the federal funds rate."
Some support for the shared common European currency came in the form of unexpectedly positive results from the euro zone's manufacturing and services sectors in May.
On Friday, the euro attacked the $1.12 handle after the latest Ifo business sentiment index revealed optimism remains high among German business captains, with the respective gauge declining only slightly and still beating analysts' expectations.
The headline Ifo Business Climate Index fell to 108.5 during the fifth month of the year, slightly below the 108.6 booked in April.
The uptrend was short-lived and in the afternoon the euro slid on the back of upbeat US inflation data that showed a stronger increase on a yearly basis than analysts had expected.
Stripped of the volatile food and energy prices, the gauge added 0.3% and 1.8% on a monthly and annual basis, respectively, versus the 0.2% and 1.8% increases in March, beating the expectations in both cases by 0.1%.
As a result, the euro fell 100 basis points to trade well below the $1.11 mark.
Over the week the shared common European currency dived 3.81% to $1.1013.
source
EUR/USD Forecast May 25-29
EUR/USD changed course and fell in a week that saw central bank pressure from both sides. What lies on the road ahead? Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.
Data in the euro-zone did not impress, with mixed PMIs and a slide in German confidence. But the trigger came from the central bank: ECB member Coeure hit the euro with talk about front-loading QE before the summer among other dovish comments. In the US, better than expected building data and still having the June hike option on the table helped the greenback recover against other currencies. Can the pair continue?
* All times are GMT
uro Swings Below $1.1 on Strong US Data, Greece Sentiment
The euro swung below $1.10 against the US dollar for the first time since late April on Monday, with Friday's forecast-beating US inflation data pushing the greenback up sharply against all the crosses, while fears that Greece won't be able to meet its upcoming debt repayments weakened the euro.
The EUR/USD pair fell 0.30% to $1.0977 on Monday morning in Asia, from $1.1007 at the close of trade in New York on Friday.
US inflation figures on Friday sent the crossrate around 1.6% lower, with core inflation rising 0.3% month-on-month in April, compared with the consensus forecast of 0.2%.
"The violent response suggests that we might be at the end of the broad USD sell-off, which has prevailed since mid-March," BNZ currency strategist Raiko Shareef said in a note on Monday. "Investors look exceedingly keen to jump back on the strong USD story, upon any evidence than the Fed remains on track for a September lift-off in rates."
This sentiment was confirmed on Friday when Fed Chair Janet Yellen suggested the bank was still looking to increase rates this year. While her speech only sent the US dollar a little bit higher on Friday, the currency's strong run continued on Monday, with the US dollar up against most of the crosses.
Meanwhile, the euro was under pressure on Monday as Greece interior minister Nikos Voutsis told a television station on Sunday that the debt-ridden nation would not be able to meet payments due in June to the International Monetary Fund (IMF).
Voutsis said the money will not be given because "it does not exist."
The interview was the most recent development in Greece's financial fallout, which analysts fear could eventually see the nation break away from the EU.
The euro was already on a downward trajectory last week after European Central Bank (ECB) officials announced they would "frontload" the central bank's asset purchases this month and next.
ECB Executive Board member, Benoit Coeure, said the central bank intends to increase its purchases of euro area assets in May and June ahead of an expected low-liquidity period in the summer.
source
EUR/USD: Euro Swings to Under $1.10 First Time Since Late April -
The euro experienced a double drop since Friday. Firstly, it was a strong broad USD rally following an upside surprise in US core inflation on Friday. Secondly, it was the announcement from Greek policymakers on Sunday, that the country will not be able to make a payment to the International Monetary Fund (IMF) on June 5, which sent the euro under $1.10 for the first time since the end of April.
The euro rose from $1.11 to above $1.12 over the Asian session on Friday, but collapsed to $1.10 in an hour following the US’ April CPI report, a cool 1.6% loss.
"The violent response suggests that we might be at the end of the broad USD sell-off, which has prevailed since mid-March. Investors look exceedingly keen to jump back on the strong USD story, upon any evidence than the Fed remains on track for a September lift-off in rates," Raiko Shareef from BNZ markets wrote on Monday.
During a quiet holiday session on Monday, the euro was trading 0.30% down to $1.0976.
Greece will not be able to make its upcoming repayments to the IMF in June unless it achieves a deal with its international creditors, interior minister Nikos Voutsis warned on Sunday.
After four months of tough negotiations with its international lenders -- the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF), any deal that could release €7.2 billion in remaining funds from its bailout package hasn't been achieved.
"The four installments for the IMF in June are €1.6 billion. This money will not be given and is not there to be given," Voutsis told Greek Mega TV on Sunday.
"We are not seeking this, we don't want it, it is not our strategy. Things have matured for a deal of logic," he added.
Technical Analysis
Volatility compared to just a few days back is very mild, as the euro has stacked in the trading range below the very important level of support at $1.11.
Right now we like the recent easing back below the 200-period simple moving average on the hourly chart and we are looking for an ideal short position entry point.
Our goal for initiating selling is a spike in prices near to the previous strong support around $1.11, which we believe is separating bulls and bears.
source
On Friday session the EURUSD tried to rally but found yet again enough selling pressure near the 1.1186 Fibonacci level to give all its gains back and closed in the red near the low of the day, creating an outside day pattern. This pattern is considered neutral so indecision may create choppy action in the market.
Spain Producer Prices Drop At Slower Pace
Spain's producer prices declined at a slower pace in April, data from the statistical office INE showed Monday.
Producer prices fell 1 percent year-on-year in April after decreasing revised 1.3 percent in March. This was the tenth consecutive fall in producer prices.
Excluding energy, producer prices grew 0.5 percent following a 0.4 percent rise in the prior month.
On a monthly basis, growth in producer prices held steady at 0.4 percent in April. Prices increased for the third straight month.
Prices of consumer goods advanced 1.2 percent annually and that of capital goods climbed 0.6 percent. Meanwhile, energy and intermediate goods prices fell 5.5 percent and 0.2 percent respectively.
source
Euro at 1-month lows against firmer dollar
The euro slid to one-month lows against the stronger dollar on Monday after U.S. data showing that consumer prices rose for a third straight month in April, as concerns over Greece continued to weigh on the single currency.
EUR/USD slid 0.35% to 1.0974, the lowest level since April 29.
The dollar strengthened broadly on Friday after data showed that U.S. core consumer prices rose 0.3% in April and were 1.8% higher on a year-over-year basis, the largest increase since October.
The greenback received an additional boost after Fed Chair Janet Yellen reiterated that the bank still expected to start raising interest rates later this year if the economy continued to improve as expected.
The euro remained under heavy selling pressure as the prospect of a Greek default continued to weigh.
On Sunday’s Greece’s Interior Minister Nikos Voutsis warned that the country would be unable to make a €305 million payment to the International Monetary Fund due on June 5 if a cash-for-reforms deal with its international lenders is not reached by then.
The euro was at three-week lows against the yen, with EUR/JPY down 0.33% to 133.40.
Meanwhile, the dollar was steady at two-month highs against the yen, with USD/JPY at 121.52.
Trade volumes were likely to remain thin on Monday with markets in the U.K., Germany and the U.S. shut for holidays.
source
If this week the price depreciation continues it might close at the end of the week at zone 80% 1.0794 ,and even at zone 90% 1.0732 . In the case of a reasonable foundation the pair may be increased to 1.1220. I'd rather play on trend and will set the targets close to those values.Good luck everybody this week!