Eur/usd - page 356

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EUR/USD: Correction Risk; Sell Broader Rallies - Credit Agricole The USD has been capped of late, irrespective of this week’s FOMC meeting minutes making a bigger caser of the Fed tightening monetary policy in December. It appears that such prospects are largely priced in by now.

Given limited room of further rising Fed rate expectations the USD may be subject to additional position squaring related downside risk, unless incoming data makes a case of accelerating growth momentum to the benefit of medium-term inflation expectations. This is especially true as several Fed members, including Fisher, just recently stressed that no final decision on a rate hike in December has been made.

The same holds true when it comes to the EUR. Given ECB members more aggressive monetary policy stance, investors have been largely pricing in a 10bp deposit rate cut and extension of QE.

Even if limited room of further rising central bank easing expectations may keep the single currency subject to correction risk, we believe that broader rallies should be sold into. As of now we keep our EUR/USD year-end forecast at 1.06.

 

After FOMC, dollar weakened, but today is a perfect day for short positions.

 
deresel:
After FOMC, dollar weakened, but today is a perfect day for short positions.

Profit taking The usual

 

The EUR/USD fell to the Fibonacci R2 at 1.0642 and lost all the Thursday gains, as the down trend still strong. let us see what is next week will reveal.

 

EUR/USD is swinging in the 100 pip range between 1.0729 and 1.0630.

 

EUR/USD forecast for the week of November 23, 2015 The EUR/USD pair went back and forth during the course of the week in what would’ve been recognized as a rather volatile candle. However, it looks as if the market should then reach down to the 1.05 handle. Any rally at this point in time it should be thought of as a selling opportunity though, at least as long as we are below the uptrend line that sits above. Ultimately, the market looks very soft, and as a result we think that selling is the only thing that you can do at this point.

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EUR/USD Forecast Nov. 23-27 EUR/USD extended its range to the downside in a choppy week. PMIs, another German survey and inflation data will be watched. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Euro-zone inflation edged up, but the euro didn’t really react. Draghi took advantage of his public appearance to weigh on the euro and also the meeting minutes of the ECB continue paving the way for more monetary stimulus. On the other side of the Atlantic, the minutes from the Fed, did not tell us anything we didn’t know: they indeed wanted to tell us that a hike is on the table for December, as we correctly understood. Data in the US was OK, with core inflation remaining at 1.9%.

Updates:

  • Flash PMIs: Monday: 8:00 for France, 8:30 for Germany and 9:00 for the whole euro-zone. These are preliminary figures for November. The final figures for October showed that the French manufacturing sector was expanding very moderately: a score of 50.6 points, just above the 50 point level separating growth and contraction. The services sector did better with 52.7 points. Manufacturing is expected to remain at 50.6 while services is predicted to slide to 52.1 points. Germany, the zone’s largest economy saw the manufacturing PMI at 52.1 and services at 54.5 points. The manufacturing number, which is the most important figure out of all 6, carries expectations for 52.2 and services are expected to slide to 54.3 points. For the whole euro-zone, the numbers stood on 52.3 and 54.1 points for manufacturing and services respectively. No material changes are predicted.
  • German GDP: Tuesday, 7:00. The initial read for the German economy showed a growth rate of 0.3%, slower than Q2. The final number will likely confirm that.
  • German Ifo Business Climate: Tuesday, 9:00. The No. 1 Think Tank carries a lot of weight as it has a very wide survey. In October, it showed a small slide to 108.2 points. Will we see the impact of the Paris Attacks as well as the VW? According to forecasts, not so fast, with 108.3 being the consensus.

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The euro recorded a decline against the dollar on Friday. The single currency completely lost the lead from the previous session and thus the pair moved to the support at 1.0613. Considering that short-term indicators are still in favor of the dollar, the probability to break the key level remains high. The session on Friday started at 1.0732 as from the beginning the bearish trend was leading . Bottom of the day was hit at 1.0640, and the session ended with only 4 pips higher.

 

On Friday session the EURUSD plunged with a narrow range and closed in the red near the low of the day.

The pair failed for the 2[SUP]nd[/SUP] time to close above the 10-day moving average and continues to consolidate in a tight range from 1.0620 up to 1.0755. A close outside these ranges would suggest the beginning of a new trend.

The key levels to watch are the 1.0819 (resistance), a Fibonacci extension at 1.0703 (resistance), the 10-day moving average at 1.0695 (resistance), 1.0622 (Support), and 1.0462 (support).

 

EUR/USD: Trading the Advance US GDP US Preliminary GDP is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity, and publication of Advance GDP could have a significant impact on the movement of EUR/USD. A reading which is better than the market forecast is bullish for the dollar.

Here are all the details, and 5 possible outcomes for EUR/USD.

Published on Thursday at 13:30 GMT.

Indicator Background

GDP is released quarterly, and provides an excellent indication of the health and direction of the economy in the past quarter. Traders should pay particular attention to this economic indicator and treat it as a market-mover.

Advance GDP for Q3 posted a gain of 1.5% for Q3, very close to the estimate of 1.6%. Preliminary GDP for Q3 is expected to be stronger, with an estimate of 2.0%.

Sentiments and levels

Recent comments from the Federal Reserve and the ECB have reaffirmed monetary policy divergence, which could result in drops for the shaky euro. This week’s data, especially from Germany, could add fuel to the fire. So, the overall sentiment is bearish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.0790, 1.0710, 1.0630, 1.0530 and 1.0460.

5 Scenarios

  1. Within expectations: 1.7% to 2.3%. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 2.4% to 2.7%: An unexpected higher reading can send the pair below one support line.
  3. Well above expectations: Above 2.8%: Such an outcome could push EUR/USD downwards, and a second support line might break as a result.
  4. Below expectations: 1.4% to 1.8%: A lower GDP figure than predicted could push the pair higher and break one level of resistance.
  5. Well below expectations: Below 1.4%. In this scenario, the EUR/USD could move higher and break above a second resistance line.

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