The break below 1.1020 led to a new depreciation, as the support at 1.0925 has the potential to provoke reversion to new bullish wave towards 1.1216. The expectation here is a counter-trend, for reversion and a break of the critical 1.1080.
Yesterday EURUSD fell and close near the low of the day on a wide range day as the Federal Reserve indicated that interest rates could rise in the coming months, possibly as early as September, if the labor market continues to strengthen. Key levels to watch today are: the daily resistance at 1.1097, the 50% Fibonacci level (support) at 1.0955 and the 61.8% Fibonacci level (support) at 1.0860.
EUR/USD Post FOMC: What Will It Take For A 1.08 Break? - SocGen
The latest FOMC statement was a teeny-weeny bit more hawkish than its predecessor, as long as you consider the reference to 'some more tightening' in the labour market being a prerequisite for lift-off, than 'more tightening', notes SocGen.
"On such small details hangs market sentiment but we can conclude firstly that the first hike is getting closer, secondly that when it happens still depends on how data evolve," SocGen adds.
"The key support for EUR/USD remains the 1.08 area and it'll take more than 'OK' US GDP to break that," SocGen argues.
" Our economists forecast a 3.3% growth rate, compared to the 2.5% consensus. After the softness in Q1, this tells a story of an underlying growth rate that remains moderate but even so, a market reaction is likely," SocGen projects.
Euro adds losses on FT report on IMF, Greece
The euro's losses against the dollar grew on Thursday as traders cited a Financial Times report that said the International Monetary Fund's staff told the board Greece's high indebtedness and its poor record of implementing reforms disqualify the euro zone nation from another IMF rescue.
The single currency hit a session low of $1.0911 before edging up to $1.0922, down 0.55 percent on the day.
The euro reached a session low of 135.73 yen before firming to 135.80 yen, down 0.2 percent from late on Wednesday
Negative German unemployment change push the EUR/USD further down.
Yesterday the EURUSD fell breaking below the 50% Fibonacci level (support) at 1.0955 and closed in the red at the middle of the daily range. This movement suggests a consolidation day, possible making an inside day. Key levels to watch today are: the 50% Fibonacci level (resistance) at 1.0955, and the 61.8% Fibonacci level (support) at 1.0860.
EUR/USD recorded a third consecutive day of declines yesterday, which is on track to record a negative week. The euro depreciated by 50 pips to a closing price of 1.0931. The session passed within the final values 1.0990 and 1.0893. The movement did not confirm the attack on 1.0920, but negative attitudes remain. Possible correction to 1.0975 should renew the interest of bears.
EUR/USD: Dollar Hit as Workers' Pay Suffers Worst Increase Since 1982
An unexpectedly disappointing gauge of employment costs in the United States brought strong bearish pressure on the US currency, shooting the EUR/USD well above the $1.10 level.
The US dollar was seen trading 1.28% lower at $1.1068, driven by the bearish mood after the employment cost index release on Friday.
The gauge showed the lowest increase in workers' pay since 1982, spurring general disappointment. As the market remains strongly sensitive to the labor market and inflation worries related to wages, such indices are still monitored due to possible Federal Reserve tightening steps in September.
Wages, making up approximately 70% of the Employment Cost Index, rose 2.1% over the year in June, lower than the post-recession high of 2.6% at the beginning of the year. The gain in wages and benefits during the second quarter was the weakest since 1981, growing only 0.1%.
Such a drag on the labor market calms the optimism on the market, which sees September's Federal Open Market Committee meeting as the most likely to raise rates, bringing the timing of the rate-hike back into question.
EUR/USD forecast for the week of August 3, 2015
The EUR/USD pair went back and forth during the course of the sessions for the week, but eventually settled on a very neutral candle. The 1.10 level is essentially “fair value” in this pair, as we have been consolidating between the 1.08 level on the bottom, and the 1.12 level on the top. With this, we think that it is more or less going to be a short-term traders market more than anything else, so having said that we are looking for trades off of daily and lower time frame charts.
It is around its fair value - but that does not exclude manipulation