EUR/USD Full Analysis
With markets focused on the upcoming FOMC meeting on Wednesday, the EURUSD is an important pair to follow this week. Rising inflation in the US could lead to a faster pace of tapering by the Fed. With the rising divergence between the Fed and ECB (ECB policymakers are possibly considering a temporary increase in APP), the pair has potential for further downside, towards the 1.10 level. New virus-related restrictions in Germany and the rest of Europe (and the high threshold of imposing restrictions in the US) also supports a bearish view on the pair.
FUNDAMENTALS:
Latest Headlines:
USD:
1. US 10-Year Treasury yields to extend the bounce above 1.60% – SocGen
2. US CPI Preview: Forecasts from nine major banks, more acceleration?
3. US inflation expectations rebound from two-month low
4. US Dollar Index Price Analysis: Monday’s Doji teases DXY bears above 96.00
5. US Dollar Index Price Analysis: Bulls step back from 200-HMA above 96.00
EUR:
1. EUR/USD to dive below 1.10 on contrasting monetary policy path with the US – ANZ
2. EUR/USD: Bears target for a sustained run below 1.1300 – OCBC
3. Germany Wholesale Price Index (YoY) up to 16.6% in November from previous 15.2%
4. Germany Wholesale Price Index (MoM) dipped from previous 1.6% to 1.3% in November
5. EUR/USD: A tad lower to 1.1300 as yields underpin USD rebound
Leading Indicators:
Upcoming Market Reports:
Here are the most important market reports for EUR/USD to follow in the coming days (all times are UTC timezone):
Tuesday at 13:30: USD PPI m/m (Expected: 0.5%, Previous: 0.6%)
Tuesday at 13:30: USD Core PPI m/m (Expected: 0.4%, Previous: 0.4%)
Wednesday at 13:30: USD Retail Sales m/m (Expected: 0.8%, Previous: 1.7%)
Wednesday at 13:30: USD Core Retail Sales m/m (Expected: 0.9%, Previous: 1.7%)
Wednesday at 13:30: USD Empire State Manufacturing Index (Expected: 25.4, Previous: 30.9)
Wednesday at 19:00: USD FOMC Statement (Expected: , Previous: )
Wednesday at 19:00: USD FOMC Economic Projections (Expected: , Previous: )
Wednesday at 19:00: USD Federal Funds Rate (Expected: <0.25%, Previous: <0.25%)
Wednesday at 19:30: USD FOMC Press Conference (Expected: , Previous: )
Thursday at 08:15: EUR French Flash Services PMI (Expected: 55.9, Previous: 58.2)
Thursday at 08:30: EUR German Flash Manufacturing PMI (Expected: 57.0, Previous: 57.6)
Thursday at 08:30: EUR German Flash Services PMI (Expected: 50.9, Previous: 53.4)
Thursday at 09:00: EUR Flash Manufacturing PMI (Expected: 57.8, Previous: 58.6)
Thursday at 09:00: EUR Flash Services PMI (Expected: 54.2, Previous: 56.6)
Thursday at 12:45: EUR Main Refinancing Rate (Expected: 0.00%, Previous: 0.00%)
Thursday at 12:45: EUR Monetary Policy Statement (Expected: , Previous: )
Thursday at 13:30: USD Unemployment Claims (Expected: 196K, Previous: 184K)
Thursday at 13:30: USD Philly Fed Manufacturing Index (Expected: 29.1, Previous: 39.0)
Thursday at 13:30: EUR ECB Press Conference (Expected: , Previous: )
Thursday at 14:15: USD Industrial Production m/m (Expected: 0.8%, Previous: 1.6%)
Thursday at 14:45: USD Flash Manufacturing PMI (Expected: 58.3, Previous: 59.1)
INTERMARKET:
US-German 2-year yields are in-line with the price.
SENTIMENT:
Positive with most global stock indices in the green. Possibly bullish for EUR, but the monetary policy divergence is in market focus right now.
Currency Strength Index:
Since London open, GBP and USD are the strongest currencies so far. AUD and CHF are the weakest.
TECHNICALS
The EUR/USD pair is trading in a daily triangle since early December with a possible downside breakout in sight. The 61.8% Fib level is respected on the hourly. Strong bearish momentum today (on rising tick volume) likely to continue ahead of FOMC.
Levels to follow (Liquidity):
1.1230-50 - Trendline and horizontal support
1.1200 - Multi-week and round-number support
== SUMMARY ==
Bearish
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With markets focused on the upcoming FOMC meeting on Wednesday, the EURUSD is an important pair to follow this week. Rising inflation in the US could lead to a faster pace of tapering by the Fed. With the rising divergence between the Fed and ECB (ECB policymakers are possibly considering a temporary increase in APP), the pair has potential for further downside, towards the 1.10 level. New virus-related restrictions in Germany and the rest of Europe (and the high threshold of imposing restrictions in the US) also supports a bearish view on the pair.
FUNDAMENTALS:
Latest Headlines:
USD:
1. US 10-Year Treasury yields to extend the bounce above 1.60% – SocGen
2. US CPI Preview: Forecasts from nine major banks, more acceleration?
3. US inflation expectations rebound from two-month low
4. US Dollar Index Price Analysis: Monday’s Doji teases DXY bears above 96.00
5. US Dollar Index Price Analysis: Bulls step back from 200-HMA above 96.00
EUR:
1. EUR/USD to dive below 1.10 on contrasting monetary policy path with the US – ANZ
2. EUR/USD: Bears target for a sustained run below 1.1300 – OCBC
3. Germany Wholesale Price Index (YoY) up to 16.6% in November from previous 15.2%
4. Germany Wholesale Price Index (MoM) dipped from previous 1.6% to 1.3% in November
5. EUR/USD: A tad lower to 1.1300 as yields underpin USD rebound
Leading Indicators:
Upcoming Market Reports:
Here are the most important market reports for EUR/USD to follow in the coming days (all times are UTC timezone):
Tuesday at 13:30: USD PPI m/m (Expected: 0.5%, Previous: 0.6%)
Tuesday at 13:30: USD Core PPI m/m (Expected: 0.4%, Previous: 0.4%)
Wednesday at 13:30: USD Retail Sales m/m (Expected: 0.8%, Previous: 1.7%)
Wednesday at 13:30: USD Core Retail Sales m/m (Expected: 0.9%, Previous: 1.7%)
Wednesday at 13:30: USD Empire State Manufacturing Index (Expected: 25.4, Previous: 30.9)
Wednesday at 19:00: USD FOMC Statement (Expected: , Previous: )
Wednesday at 19:00: USD FOMC Economic Projections (Expected: , Previous: )
Wednesday at 19:00: USD Federal Funds Rate (Expected: <0.25%, Previous: <0.25%)
Wednesday at 19:30: USD FOMC Press Conference (Expected: , Previous: )
Thursday at 08:15: EUR French Flash Services PMI (Expected: 55.9, Previous: 58.2)
Thursday at 08:30: EUR German Flash Manufacturing PMI (Expected: 57.0, Previous: 57.6)
Thursday at 08:30: EUR German Flash Services PMI (Expected: 50.9, Previous: 53.4)
Thursday at 09:00: EUR Flash Manufacturing PMI (Expected: 57.8, Previous: 58.6)
Thursday at 09:00: EUR Flash Services PMI (Expected: 54.2, Previous: 56.6)
Thursday at 12:45: EUR Main Refinancing Rate (Expected: 0.00%, Previous: 0.00%)
Thursday at 12:45: EUR Monetary Policy Statement (Expected: , Previous: )
Thursday at 13:30: USD Unemployment Claims (Expected: 196K, Previous: 184K)
Thursday at 13:30: USD Philly Fed Manufacturing Index (Expected: 29.1, Previous: 39.0)
Thursday at 13:30: EUR ECB Press Conference (Expected: , Previous: )
Thursday at 14:15: USD Industrial Production m/m (Expected: 0.8%, Previous: 1.6%)
Thursday at 14:45: USD Flash Manufacturing PMI (Expected: 58.3, Previous: 59.1)
INTERMARKET:
US-German 2-year yields are in-line with the price.
SENTIMENT:
Positive with most global stock indices in the green. Possibly bullish for EUR, but the monetary policy divergence is in market focus right now.
Currency Strength Index:
Since London open, GBP and USD are the strongest currencies so far. AUD and CHF are the weakest.
TECHNICALS
The EUR/USD pair is trading in a daily triangle since early December with a possible downside breakout in sight. The 61.8% Fib level is respected on the hourly. Strong bearish momentum today (on rising tick volume) likely to continue ahead of FOMC.
Levels to follow (Liquidity):
1.1230-50 - Trendline and horizontal support
1.1200 - Multi-week and round-number support
== SUMMARY ==
Bearish
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