Eur/usd - page 314
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EUR/USD recovered from 2 days drop with the FOMC minutes.
EUR/USD rose after the FOMC minutes today and the pair reached the resistance at 1.1130. Should it break above it it will probably head for the next resistance, which is at 1.1180 and is visible on the daily filter chart.
EUR/USD surges to halt skid, as timing of Fed rate hike remains unclear
EUR/USD surged on Wednesday halting a five-day losing streak, as the minutes from the Federal Open Market Committee's July meeting provided little to no indication that the U.S. central bank could raise interest rates before the end of the fall.
The currency pair traded between 1.1018 and 1.1135, before settling at 1.1121, up 0.0096 or 0.87% on the session. The euro closed above 1.11 against the dollar for the first time in four sessions. After Wednesday's gains, EUR/USD is now up by more than 2.65% over the last month of trading.
The pair likely gained support at 1.0808, the low from July 20 and was met with resistance at 1.1213, the high from August 12.
Following the completion of its July FOMC meeting three weeks ago, the Fed provided no explicit indications that it could raise short-term interest rates when it meets next in September. At the time, the Fed reiterated that it needed to see further improvements in the U.S. labor market and signals that long-term inflation had moved gradually toward its target of 2% before it decided to hike interest rates. The minutes from last month's meeting released on Wednesday showed that the Fed could continue to take a "data-driven" approach over the next weeks, before determining whether to raise short-term interest rates for the first time since 2006 when it meets next in September.
On Wednesday morning, the U.S. Bureau of Labor Statistics (BLS) said its Consumer Price Index (CPI) for the month of July ticked up 0.1%, following solid gains of 0.3% and 0.4% in June and May respectively. A modest gain in apparel prices failed to offset declines in electricity and auto prices. Airfare prices also weighed on the July CPI, after plunging 5.6% -- its sharpest monthly drop in two decades. Analysts expected the July CPI to increase 0.2% on a monthly basis.
The BLS' headline inflation reading also increased 0.2% on a year-over-year basis, after posting a yearly gain of 0.1% in June. The Core CPI, which strips out food and energy prices, also inched up 0.1% from its June level, below expectations for a 0.2% monthly gain. Over the last 12 months, the core reading has increased 1.8% after remaining unchanged from June.
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EUR recovered its positions against USD on Wednesday. The single currency met the positive expectations and rose against the dollar, thanks to the dynamic economic environment in the US. Thus the negative series was interrupted and the euro sent a request for the continuation of the bullish trend until reaching the resistance at 1.1214. Wednesday session started at a price of 1.1020 and by the end the single currency gained 99 pips. A powerful upward movement was registered at the end of trading day and the peak was reached at 1.1133.
Yesterday EURUSD initially fell but found enough buying pressure at the 50-day moving average, rallying back up and close near the high of the day on a wide range day as the Federal Reserve showed a much more dovish view on the economy and external factors, namely China. Participants pushed back their expectations of rate hike in September by the Fed.
Key levels to watch today are: A break above the 200-day moving average may set a tone for a bullish run in the mid-term to a daily resistance at 1.1236 or even higher up to 1.1460.
EUR/USD Technical Outlook: Euro Escapes Bearish Channel, Bulls Target $1.12
The pair was not successful on the downside and bears failed to push the euro to the $1.100 barrier. It stopped 30 pips above and sharply reversed, soaring toward the $1.12 barrier on Thursday.
Technical indicators on the 4-hour time frame are in favor of bulls. There is a clear bullish momentum seen on the chart, while the MACD has turned positive on Thursday, indicating further upside is possible. The stochastics is in the overbought zone, so this calls for at least a short period of consolidation, before continuing to higher levels.
Moreover, the pair broke the recent bearish channel, with a conquered resistance at $1.1140. This now serves as a major support area and the daily outlook prefers buying dips at these prices, targeting the strong psychological resistance of $1.12. Bears sold the rally here last week and are ready to defend it yet again, however, the dollar has lost nearly all bullish momentum and traders are covering their longs as the FOMC minutes on Wednesday betrayed dollar bulls.
A closer look on the shorter time frame supports the advancing outlook. The defeated declining channel is also well seen here, with the pair hitting stops above and continuing higher. The MACD is in positive territory after being below zero for almost a week, supporting the bullish case. The momentum is slowly rising, although the Stochastics is seen diverging and moving in overbought conditions, which once again, calls for caution, the same as on the 4-hour chart.
Nevertheless, the daily outlook for Thursday remains bullish, with buying dips to the $1.1140 as a preferred scenario, stops below that area and targets at $1.12, which should be the maximum for bulls today, considering overbought conditions on both the time frames.
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Possible point D of 2 bearish harmonic patterns and a pennant as trend continuation pattern down. Happy trading.
EUR/USD will be testing 1.1220 which is the highest price since the beginning of July.
Indeed, EUR/USD is testing the previous high and should it manage to break above that level it will likely continue rising at least until it reaches the resistance at 1.1400.
France's Manufacturing at 4-Mth Low: Aug Flash PMI
French manufacturing failed to regain momentum in August, while servicesretained their driving force in the private sector, a preliminary survey by Markit Economics revealed on Friday.
The flash manufacturing PMI in France came in at 48.6 in the eight month of the year, worse than the final reading of 49.6 seen in July, and below expectations of 49.7. Today's release marks a 4-month low for the sector.
"Output growth in France’s private sector economy cooled to a four-month low in August, suggesting that third-quarter GDP may disappoint again following stagnation in Q2. An improvement in service providers’ business expectations to a near three-and-a-half year high provided some rare In conjunction with positive news, but manufacturing continued to struggle amid a sharper drop in new orders," Jack Kennedy, senior economist at Markit, said.
The indicator is a key gauge of overall economic health, because businesses have to respond quickly to changing market conditions.
Services PMI
Meanwhile, business activity in France's services sector also slightly slowed in August, according to the closely-watched preliminary survey.
The flash services PMI came in at 51.8 in the reported month, compared to the 52.0 seen in the seventh month of the year. Analysts had expected a 52.0 result.
The figures didn't bode well for the third quarter GDP, following the flat result recorded in the second quarter of the year, although French authorities, including the central bank, believe otherwise.
Preliminary GDP data
Provisional GDP data for the second quarter of this year in France confirmed that momentum in the second largest economy in the euro zone slowed from the previous quarter, although the economy enjoyed lower oil prices and a weaker shared currency.
Economic output in France posted 0.0% growth in the three-month period ending June 30, 2015, after posting a revised 0.7% growth in the first quarter of 2015, measured on a quarterly basis. The reading came in below market projections.
On a yearly basis, the final GDP estimate revealed a 1.0% increase, also below analysts' estimates of 1.1%, but higher than the revised 0.9% growth in the previous quarter.
BoF Q3 outlook
The euro area's second biggest economy will accelerate its growth during the third quarter, a survey conducted by the Bank of France suggested in July.
The French economy will expand 0.3% in the third quarter from the second, the central bank's survey of business activity in July said.
A month ago, the survey had predicted 0.2% growth on the same the basis.
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