Eur/usd - page 244
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EURUSD initially fell on Friday’s session but found enough support at the 10-day moving average to turn around and closed slightly above the open in a choppy trading day. The 10-day moving average is acting as a dynamic support so a break below could throw the pair to a daily support at 1.0622.
EUR/USD: Dollar Bulls Get Second Wind With $1.08 at Finger Tips
The US dollar extended its gains on the single European currency on Monday, as traders prepare for an event-heavy week that will culminate with the release of the latest US jobs data on Friday.
The euro was down 0.63% at $1.0816 on Monday after a fresh bunch of inflation data from the US and Germany, and was on track to book its third daily loss in a row against the dollar.
For now, the area immediately above $1.08 appears to cause some trouble for the dollar bulls. This may change by the end of the week, when the release of the March non-farm employment report is due.
Although the reaction to the payrolls data in recent quarters has been somewhat lackluster, it is still the most important piece of economic data available - particularly since recent releases have been pointing to yet another deterioration in GDP, after the fourth quarter growth rate slipped to 2.2%.
Monday's update on consumer spending, for example, showed nominal expenditures rose 0.1%, undershooting the already modest expectations of the market. More importantly though, the core inflation index from the report managed to exceed analysts' forecasts, at least in year-over-year terms.
In Europe's number-one economy, consumer prices rose a stronger-than-expected 0.5% in March and the year-over-year inflation rate edged up to 0.3%, matching the market's forecast.
Fresh data revealed the European Central Bank bought €41 billion in bonds in the final week of March as part of its attempt to boost its balance sheet to 2012 levels of more than €3 trillion, which will necessitate about €1.1 trillion in bond purchases over the coming year and a half.
"We revised lower our EUR/USD forecast to 1.00 for year-end 2015 and 2016, believing ECB balance sheet expansion will pressure the EUR," Bank of America Merrill Lynch analysts said in a note on Monday.
Previous rally
Just two weeks ago, the world's reserve currency reached a 12-year high, stopping just 5¢ short of being on par with the euro, as traders speculated the Fed would raise rates this year, possibly as early as June.
Then a series of weak Q1 data indicated the US economy had lost a lot of steam early this year due to bad weather. Also, the sharp appreciation of the currency has also been frowned upon by both Fed policymakers and US exporters.
In addition to that, the economic forecasts from US policymakers showed the Fed may not be in such a rush to hike after all. The median of the 17 forecasts delivered in March suggested only two hikes to a year-end level of 0.625%, rather than at least four hikes to 1.125% projected three months earlier.
Still, the Federal Open Market Committee tweaked its post-meeting communique on March 18 in a way that opened up at least a theoretical option of lift-off in June. Yet officials will have to be reasonably confident that inflation will return to the 2% target over time, in order to actually embark on the rate hike process.
By Thursday, the EUR/USD had rallied to $1.105, climbing just above the post-FOMC spike, to the highest level in three weeks.
In what turned out to be quite a hawkish late-afternoon Friday speech - at least in the eyes of the market - the Fed Chair Janet Yellen said that only a deterioration in wages, core prices and other inflation indicators would make her "uncomfortable [with] raising the federal funds rate" sometime later this year.
More importantly, she stressed that at the same time, additional improvements in these metrics were not "indispensable" for her to "achieve reasonable confidence" about the inflation outlook.
Technical analysis
Prices of EUR/USD have already tested the prior swing and spike high, slightly above the big round number of $1.1000, before reversing immediately and moving one figure lower to $1.09 over/under area.
We are expecting that volatility will calm down and EUR/USD will be trading in a range in an ideal world above $1.08 and below $1.10.
We do not like taking the breakout above the big round number of $1.10, as we think it will very likely become a trap. We want to see a longer-term correction before another attack.
Due to general and long-term downtrend we are more bearish and if prices break below the previous swing low of $1.08, we will very likely see a sharp sell-off with a possible test of $1.05.
source
Thank you for the news.
EUR/USD slightly down, amid little development with Iran, Greece talks
The U.S. dollar posted modest gains against the euro on Monday, as currency traders awaited a possible deal regarding Iran's nuclear program, as well as the release of a highly-anticipated U.S. jobs report at the end of the week.
Strong U.S. data coupled with continuing tension in Greece, as well as a potential expansion of the quantitative easing program in China factored into the slight strengthening of the dollar.
EUR/USD fell 0.51% or .0056 to 1.0834 on a light day of trading. The pair reached a high of 1.0895 in European afternoon trading, before falling to a daily-low of 1.0815 hours later. On Friday, there was little movement with the pair following Janet Yellen's speech at the Federal Reserve Bank of San Francisco Conference.
EUR/USD likely received support at 1.05 its low from Mar. 11 and resistance at 1.14 its high from mid-February.
A U.S. State Department spokesman said on Monday afternoon that there's a "50-50 chance," an agreement with Iran will be reached by Tuesday night's deadline. While oil futures spiked shortly after the announcement, it had little effect on the currency pair.
Elsewhere, strong housing numbers and encouraging personal income data led to mild increases in the dollar on Monday. The U.S. Department of Commerce reported that personal income last month rose 0.4%, above expectations for a 0.3% increase. In addition, a report from the National Association of Realtors found that contracts to purchase previously owned homes, soared 3.1% in February, significantly exceeding expectations of a 0.4% rise.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, increased 0.68% to 98.28.
Earlier on Monday, People's Bank of China governor Zhou Xiaochuan remarked that there might be room in the Chinese economy for additional monetary easing. The possibility that a struggling Chinese could require a boost from a stimulus program by its central bank could have sent investors fleeing to U.S. sovereign debt.
Yields on the U.S. 10-year inched up 0.001 to 1.949, while yields on the U.S. 30-year rose 0.022 to 2.549. Yields on the Germany 10-year remained relatively unchanged at 0.21.
In Helsinki, German chancellor Angela Merkel indicated that Greece would not receive any further aid until it revised a list of proposed reform measures it submitted to its euro zone creditors on Friday. The measures are considered essential for Greece to receive a financial lifeline that could allow it to stave off bankruptcy.
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German Shoppers Lose Appetite in February
Retail sales data for Germany were weaker in February after a rather solid reading booked in the previous month, the latest report from the German statistical office (Destatis) showed on Tuesday.
Retail turnover gave up 0.5% in real terms month-on-month in February, compared to a 2.9% increase recorded in the previous month and market expectations of a 0.7% decline.
Measured on an annual basis, the gauge rose 3.6% in the reported period following an increase of 5.0% in the preceding month, while analysts had projected an expansion of 3.4%.
The retail sales index, also known as 'real retail sales', is the primary gauge of consumer spending which measures the change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. The figure is also an important component of GDP.
CPI edges higher in March
On Monday the preliminary inflation data were released in Germany and showed price growth in the country accelerated in March, however, the gauge remained well below the desired levels.
Inflation in the euro zone’s largest economy added 0.3% year-on-year during the third month of the year, following the 0.1% upturn seen in February.
On a monthly basis, the CPI added 0.5%, following the 0.9% hike seen a month before.
French PPI Feb mm +0.7% vs -1.0% prev
Stronger than expected/more inflationary data but euro not impressed
German Jobless Rate Hits 2-Decade Low in March
The German labor market maintained its positive trend as the number of unemployed people in the country declined for the sixth consecutive month in March. Thanks to earlier reforms, the German labor market has become solid and less affected by any short-term economic volatility.
In Tuesday's report, Germany's Federal Statistics Office said the number of people out of job fell by a seasonally adjusted 15,000 during the third month of the year, compared to expectations for a drop of 12,000.
In February, the gauge gave up 20,000.
The adjusted jobless rate, meanwhile, booked 6.4%, maintaining the lowest level on record going back more than two decades. The previous figure was 6.5%.
Strong growth outlook
The German economy will show strong growth in the first half of 2015, driven by exports and robust consumer spending, the German Bundesbank said last week in its fresh monthly report.
"The German economy, following surprisingly strong growth at the end of 2014, should have continued to grow strongly in the first quarter of 2015," the bank wrote in the document.
Growth will be driven by robust exports and private consumer spending, the central bank predicts.
"For the second quarter, too, the robust economic uptrend will continue. The main driving forces are foreign demand, private consumption and, to a lesser extent, residential construction," the report said about the economic prospects.
EURUSD fell on yesterday session with a narrow range day of 80 pips, creating an inside day and closed near the low of the day. The pair is still in a bearish phase and closed below the 10-day moving average. The stochastic is showing bearish momentum.
Expecting downward move to a Fibonacci level at 1.0680 on a break below previous day low at 1.0809 (scenario 1).
EUR/USD: Pair Bleeds, Drops to $1.07 After Euro Zone CPI
CPI from the euro zone failed to bring any positive news on Tuesday and the pair remained under heavy selling pressure as selling offers were bombarding the market. CPI for the entire euro zone on a yearly basis printed -0.1%, in line in expectations and confirmed the deflationary outlook for the euro zone. Moreover, the unemployment rate ticked higher from 11.2% to 11.3%.
The euro failed to receive any support and was trading sharply lower against the greenback at $1.0720, around 1% lower on the day. Breaking below the $1.08 caused further selling and stops were hit. The next target for bears should be $1.07, followed by $1.05, which could be reality if Friday's payrolls don't disappoint.
Earlier in the session, German labor market data positively surprised, but failed to boost the shared currency as the economic giant is long known as the strongest economy in the euro zone. The unemployment rate ticked lower to 6.4% from 6.5%, while the employment change came out at -15,000, better than the -12,000 that was expected.
Looking ahead, the essential US non-farm payrolls are due on Friday, with the headline number expected at 250,000. Upbeat labor market numbers are expected to support the greenback and the pair might drop further. The unemployment rate should remain at 5.5%.
According to the CFTC and Rabobank's research, USD longs ticked a little lower in the wake of the March 18 FOMC meeting, though they remain at extremely elevated levels, while EUR shorts surged beyond their 2012 peak and to a record high, as the situation between Greece and its creditors became increasingly fractious.
"EURUSD is likely to lose further momentum under the 1.08-level with little in the way of resolution regarding EU-Greek developments. Markets are also likely to be in ‘wait-and-see’ mode until the April ECB meeting. What’s more, EURUSD is likely to find downside direction from this week’s US payroll employment report which is expected to strike a positive tone with a +260K reading expected. Today, although we expect euro zone CPI to improve to a -0.1% y/y pace for March from -0.3% in February, as our economists argue in Macro Matters, the ECB is very unlikely to curtail its QE program given the wide output gap and inflation still so far from target. As such, we expect to see no benefit for the EUR from this improvement in data. We remain broadly bearish on the EUR," analysts at BNP Paribas wrote in a note on Tuesday.
EUR/USD fell yesterday dramatically with a drop of more than 100 pip since the break of the support line 1.0820 , Price keep pushing down aiming for the next support level 1.069.