Eur/usd - page 485
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Euro and pound feeling the wrath of the dollar bulls
Inflation tick higher swamps euro and pound
A slight beat on inflation is helping the US dollar put a beating on the market.
The dollar has held a bid all week despite dovish comments from Brainard and a weak retail sales report. So it's not a shock to see it rallying on a small dose of good news.
EUR/USD is now down 60 pips since the report at 1.1170 with the pound falling by about the same margin and down to 1.3108. It's been a tough stretch for cable with the early September gains now erased.
It's not just the euro and pound either, the dollar is grabbing an increasing bid right across the board.
source
EUR/USD Weekly Outlook September 19-23
EUR/USD traded in a range for a bulk of the prior week, trading above and below the weekly open with a lack of direction. Volatility arose towards the end of the week following data released out of the United States on Thursday and Friday, with the latter triggering a bearish range break. While the technical break has provided a directional bias, the week ahead is certain to introduce further volatility as the highly anticipated Fed meeting will provide clarity on the central bank’s monetary policy intentions.
Thursday’s data release came in mostly below analyst expectations but failed to create a sustained drop in the Greenback, hinting of underlying strength in the currency. Retail sales were reported to decline 0.3% in August, below the expected 0.1% drop and an unchanged reading in the prior month. Core retail sales and PPI also fell short in their August readings, while the Philly Fed manufacturing index showed improvement and the weekly unemployment claims came in relatively in-line with expectation. The net effect in the EUR/USD was minimal, as a spike higher in the pair was quickly reversed, although stops were likely to have been hit during the data release as a high for the week was made.
source
The single currency managed to break its recent range on Friday.EUR/USD was trading in a relatively narrow range last week, but the pair broke the psychological support at 1.1200 to closed the session with a drop of 90 pips. Current attitudes remain negative, but for confirmation of the downward trend is needed breakthrough the levels at 1.1120/1.1105. Support is located at 1.1105 and resistance is seen at 1.1195 and 1.1280.
On the last Friday’s session the EURUSD plunged with a wide range and closed near the low of the day, in addition managed to close below Thursday’s range, which suggests a strong bearish momentum.
The pair closed below all three moving averages 10, 50 and the 200-day that should act as dynamic resistances.
The key levels to watch are: a 61.8% Fibonacci retracement at 1.1347 (resistance), a daily resistance at 1.1237, the 200-day moving average at 1.1194 (resistance), and a daily support at 1.1097.
Eurozone current account SA July EUR +21.0 bln vs +29.5 bln prev
Eurozone July current account data from the ECB 19 Sept
Softer than expected not negative the upward revision.
The post-Brexit "Shore up the euro before it's too late" report is out
A bunch of academics, think tankers and former policymakers have published "Repair and Prepare - Growth and the Euro after Brexit"
- "The
ECB is in a Catch-22 situation," said Enderlein. "If it says that it's
out of ammunition, it is weakening its own position. But if it says
everything is fine, then governments won't do their part."
The report recommends a number of fixes, Reuters have more here.EUR/USD Bounces Near 200 DMA
EUR/USD edged higher to start out the week, as the pair closed the prior week off near its 200-period daily moving average. Ahead of Wednesday’s FOMC meeting the currency pair is likely to consolidate as a catalyst is lacking for a downside break of the indicator, and profit taking ahead of the volatile event is likely to keep the pair firm.
The 200 DMA currently resides at 1.1145 and a bounce was seen slightly ahead of the indicator as the pair reached a low of 1.1150 on the day. A high of 1.1200 was made on the day, prior to a turn lower as a break above resistance at 1.1188 was not sustained. The resistance level reflects highs following the UK vote, and had kept the exchange rate lower in July. The failure to scale above resistance has resulted in a bearish shooting star pattern on the 4-hour chart, while a broader turn has yet to be confirmed.
The smaller time frames show buyer’s stepping in following the European close as support at 1.1170 triggered a bounce. The level reflects prior highs from earlier today as seen on an hourly chart. A break of the level would provide early indications of a turn lower, while the focus remains to the upside as the early week trend points to a recovery in the near-term.
The first level of resistance remains at 1.1188, and a sustained break above the level would provide additional conviction of a continuation of the recovery. Further resistance is seen at 1.1216, as a confluence of technicals are seen at the level. A 50% Fibonacci retracement measured from Thursday’s spike high falls at the level, while a horizontal level from lows seen ahead of the sharp decline last week on a 4-hour chart comes into play. As well, a bearish flag pattern was seen playing out in the past week, and the lower trendline of the pattern is seen within close vicinity of the mentioned level.
Data out of the United States indicated an improvement in the housing market as the NAHB house price index was reported at 65, beating the analyst consensus of 60 and the prior reading of the same. The next data release pertaining to the pair will be German PPI figures on Tuesday, followed by building permits and housing starts out of the United States.