Analysis and Forecast EUR / USD - Weekly overview (27.07-31.07.)
Summary of last week:
The euro strengthened against the dollar which may slightly surprising, given the recent readings from Europe and the USA. It is worth mentioning that the readings from Europe were worse or mixed, while data from the US good and agree with the notion that the US economy is doing well. The opening took place at the level of 1.0831 and at the end of the week we watched the closing at 1.0984. Maximum recorded around 1.1020 (50% fibo of 1.1218 drops - 1.0808).
Why, then, the market does not favor the dollar? Analyzing the dollar index, we can see that the market after reaching the resistance zone at 98,00-98,30 led to a small correction. Assuming that in the near future we will once more good data from the US, the Fed certainly will be talking more boldly to raise interest rates in the US later this year. In addition, it should be noted that the European economy is far from reflecting a further support for Greece, may not be sufficient without cancellation of part of the debt. This mix of information will support the dollar.
Economic calendar for next week:
Monday: Ifo business sentiment index in Germany, then the United States will be presented to the underlying contract assets;
Tuesday: PMI services and the consumer confidence index of the Conference Board in the US;
Wednesday: GfK consumer climate in Germany, the sale of real estate in progress, the FOMC statement;
Thursday: change of unemployment in Germany, the economic bulletin the ECB, GDP in the US;
Friday: CPI and unemployment rate in the Euro zone, the Chicago PMI index and the index of consumer sentiment University of Michigan;
Forecast for Monday:
At the moment the currency pair is in the process of adjustment falls in the level of 1,1218-1,0808. Last week there was a test level of 1.1013, which coincides with the level of 50% fibo recent declines. Taking into account a purely technical analysis, we can assume that there is a chance to attack and test the level of 1,1061-65 (61.8% fibo recent declines 1,1218-1,0808). In my opinion, the level of 1.1065 seems to aim maximum, if growth is to be only a correction. At this altitude the game should turn to the supply side, and we should return to the strengthening of the dollar in a wider horizon.
Is variant of test 1.1065 level is the preferred option? In my opinion, possible in the case of receipt of tomorrow good data from Germany and worse readings from the US.
Otherwise, you come to the end of the correction at the level of 1.1013 in this case will witness the strengthening of the dollar, which will aim to recent lows. Supply in this case should overcome support at 1.0969 and 1.0916.
In my opinion, taking into account the economic situation in Europe, the problems in Greece as well as the good condition of the US economy and worse, recent readings from China, you should expect flight of investors towards the dollar.
The euro strengthened against the dollar which may slightly surprising, given the recent readings from Europe and the USA. It is worth mentioning that the readings from Europe were worse or mixed, while data from the US good and agree with the notion that the US economy is doing well. The opening took place at the level of 1.0831 and at the end of the week we watched the closing at 1.0984. Maximum recorded around 1.1020 (50% fibo of 1.1218 drops - 1.0808).
Why, then, the market does not favor the dollar? Analyzing the dollar index, we can see that the market after reaching the resistance zone at 98,00-98,30 led to a small correction. Assuming that in the near future we will once more good data from the US, the Fed certainly will be talking more boldly to raise interest rates in the US later this year. In addition, it should be noted that the European economy is far from reflecting a further support for Greece, may not be sufficient without cancellation of part of the debt. This mix of information will support the dollar.
Economic calendar for next week:
Monday: Ifo business sentiment index in Germany, then the United States will be presented to the underlying contract assets;
Tuesday: PMI services and the consumer confidence index of the Conference Board in the US;
Wednesday: GfK consumer climate in Germany, the sale of real estate in progress, the FOMC statement;
Thursday: change of unemployment in Germany, the economic bulletin the ECB, GDP in the US;
Friday: CPI and unemployment rate in the Euro zone, the Chicago PMI index and the index of consumer sentiment University of Michigan;
Forecast for Monday:
At the moment the currency pair is in the process of adjustment falls in the level of 1,1218-1,0808. Last week there was a test level of 1.1013, which coincides with the level of 50% fibo recent declines. Taking into account a purely technical analysis, we can assume that there is a chance to attack and test the level of 1,1061-65 (61.8% fibo recent declines 1,1218-1,0808). In my opinion, the level of 1.1065 seems to aim maximum, if growth is to be only a correction. At this altitude the game should turn to the supply side, and we should return to the strengthening of the dollar in a wider horizon.
Is variant of test 1.1065 level is the preferred option? In my opinion, possible in the case of receipt of tomorrow good data from Germany and worse readings from the US.
Otherwise, you come to the end of the correction at the level of 1.1013 in this case will witness the strengthening of the dollar, which will aim to recent lows. Supply in this case should overcome support at 1.0969 and 1.0916.
In my opinion, taking into account the economic situation in Europe, the problems in Greece as well as the good condition of the US economy and worse, recent readings from China, you should expect flight of investors towards the dollar.