Eur/usd - page 425
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EUR/USD: Euro Stays Lower After PMIs, Heading for Weekly Loss The EUR/USD was trading in a relatively tight range during the European market hours on Friday, slightly falling from an intraday high above $1.13 seen earlier in the morning.
The minor setback occurred amid a heavy set of services and factory PMI figures, which mostly came out weaker than expected in Germany and the European Union.
In addition, the trading course of the major forex pair remained influenced by European Central Bank (ECB) President Mario Draghi, who spoked in Frankfurt on Thursday.
As widely expected, the central bank left rates unchanged at the record low, while Draghi repeated the need for lose monetary policy for a prolonged period of time due to the still low inflation and downplayed the Bank's critics, especially from Germany.
On Friday, the EUR/USD edged 0.25% down to $1.1260, heading for a small weekly loss as the result of a setback during the second period of this week. Moreover, the 14-month crucial resistance at $1.14 is going to require heavy artillery to break it, especially as ECB's Draghi failed to provide any real incentives on Thursday.
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The euro is still influenced by Mario Draghi’s speech and is facing weekly loss. For breaking the strong resistance at 1.14 is needed more powerful impulse.
EUR/USD forecast for the week of April 25, 2016 The EUR/USD pair initially tried to rally during the course of the week but struggled after words coming out of the ECB suggested that it was willing to lower interest rates as well as anything else needed to fight lack of inflation. With this being the case, we did up forming a bit of a shooting star we may very well drop from here. However, there is quite a bit of support below, so having said that it’s probably going to be easier to trade this market from the short-term charts as we expect to see quite a bit of volatility.
EU Market Insight: King Could Be Kingmaker The Spanish economy remains fragile and the current political stalemate is not helping.
King Felipe VI of Spain will convene a meeting of leaders of all political parties on Monday in a last attempt to strike a deal and form a coalition government. Otherwise there will be fresh elections in June. However, the chances are very slim since political parties ruled out on Thursday any chance to form a government. Spaniards have been without a government since the December 21, 2015 parliamentary elections.
Mariano Rajoy, who now serves as acting prime minister, and his People’s Party (PP) won the December vote but fell short of a majority and could not find enough support to form a viable government. The PP won only 123 seats in the 350-seat lower house, while the opposition Socialists party secured 90. Political newcomers, the anti-austerity Podemos (We Can) and centrist Ciudadanos (Citizens) got 69 and 40 mandates, respectively.
Rajoy blames Socialist leader Pedro Sanchez for the stalemate. "Pedro Sanchez can avert the elections. I call him once more to work on a grand coalition government that would bring stability to Spain," he said. However, Sanchez and his Socialists have shown no interest to share power and responsibility with Rajoy, and firmly ruled out such a possibility.
On the other side, the Socialists themselves criticized the Podemos led by Pablo Iglesias for not joining a three-member coalition with the Socialists and liberal newcomer Ciudadanos. Instead, Podemos' members last week agreed to form a joint platform with a former communist movement if there is a new election. Such a coalition could overtake the Socialists as the largest political force on the left.
A very slim chance arose when Ciudadanos leader Albert Rivera called on Rajoy and Sanchez to allow a transition government lead by an independent personality to be formed.
"We should assume that we have failed and we should work on a consensus government that could make reforms," Rivera said. No chance, Sanchez replied.
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EUR/USD: Balanced Spec Positioning; Sell Rallies In line with consensus the ECB left monetary policy unchanged this week. Although central bank President Draghi left all options regarding a more aggressive policy stance open, he indicated too that considerably higher downside risks would be needed in order to trigger a change. This is especially true as more time may be needed to evaluate the latest policy actions’ impact on the economy.
Considering that speculative positioning is broadly balanced and as the ECB is neither making a case of rising rate expectations, the single currency is unlikely to face more considerable upside risk from the current levels, at least against currencies that may benefit from a more constructive rate outlook.
This in turn suggests we expect EUR/USD to remain a sell on rallies. Crosses such as EUR/CHF may stay supported.
In terms of data next week’s main focus will be on April CPI estimates.
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After three consecutive sessions of losses the euro bounced back and today is trading higher with 29% at 1.1259.
On the last Friday’s session the EURUSD fell with a narrow range and close near the low of the day, in addition closed below the previous day low, suggesting a strong bearish momentum.
The pair is trading below the 10-day moving average that is acting as a dynamic resistance but is above the 50 and the 200-day moving averages.
The key levels to watch are: A daily resistance at 1.1459, the 10-day moving average at 1.1281 (resistance), the previous swing high at 1.1342 (resistance), a daily support at 1.1237, the 50-day moving average at 1.1201 (Support) and a previous swing low at 1.1144 (support).
German Ifo surveys today frustrated the markets, but nonetheless the Euro stayed elevated. Immediate support downwards is seen at 1.1237 /38% Fibonacci retracement level/ with staying exposed for breaking 1.1215 /24% Fibonacci etracement level/.
Yesterday EURUSD rose with a narrow range and closed near the high of the day, however closed within previous day range, thus creating an inside day, suggesting a weak bullish momentum.
The pair is trading below the 10-day moving average that is acting as a dynamic resistance but is above the 50 and the 200-day moving averages.
The key levels to watch are: A daily resistance at 1.1459, the 10-day moving average at 1.1280 (resistance), the previous swing high at 1.1342 (resistance), a daily support at 1.1237, the 50-day moving average at 1.1219 (Support) and a previous swing low at 1.1144 (support).
EUR/USD had a slight bullish momentum yesterday, marking a daily high at 1.1277. The outlook is neutral, possibly with minor bullish impulse. The nearest support is seen at 1.1215 and if it might be broken, may set bears on pressure to test 1.1150.