Hi traders. After we closed our last EURUSD trade in profit, it's time to look for trading opportunities in the coming week. Here is a complete FIST analysis for the pair with some tips on how to trade the next week.
FUNDAMENTALS:
EUR traded with a heavy bearish bias last week as markets supported the USD ahead of the US labor market report, the weekend, and the US holiday next week. Now that the NFP came in stronger than expected, the EURUSD pair could see further weakness despite the rise in US unemployment rates and pressure on wages.
The FOMC meeting minutes, due on Wednesday, will likely attract attention as markets will follow how hawks and doves are arguing their cases, especially the seven hawks who see the first rate hike in 2022.
In the euroarea, the main highlights for the next week are Sentix and ZEW sentiment reports. Although there are some factors that could lead to EUR strength, the dovish stance of the ECB is likely to provide further selling pressure in the currency, at least until we see some strong hard data from the eurozone.
Latest Headlines:
Here are the latest news headlines for both currencies.
USD News:
- US dollar moving to new lows. Now the weakest of the major currencies
- US factory orders for May 1.7% versus 1.7% estimate
- US stocks are opening higher after less scary jobs report
- US Dollar Index retreats from tops post-Payrolls, back around 92.40
- US Dollar Index Price Analysis: Next on the upside comes in 93.50
- USD needs a much larger surprise on NFP to sustain further gains – TDS
EUR News:
- EUR/USD stages limited rebound after US NFP data, stays near mid-1.1800s
- EUR/USD bounces off fresh lows, retakes 1.1850 post-NFP
- EUR/USD Price Analysis: Looks offered and could slip back to 1.1800
- EUR/USD: Key resistance at 1.1976/2001 to cap even on NFP miss – Credit Suisse
- Eurozone May PPI +1.3% vs +1.2% m/m expected
- EUR/USD stays weak, approaches 1.1800 ahead of Lagarde, NFP
Upcoming Market Reports:
USD: ISM services (Jun), JOLTS jobs openings (May), FOMC Minutes, Initial jobless claims (Jul), Wholesale trade sales, inventories (May)
EUR: Services PMI (Jun), Sentix investor confidence (Jul), ZEW survey (Jul), Retail sales (May), German Industrial Production (May), German Trade, current account (May)
INTERMARKET:
Although the USD and UST yields had a sluggish performance on Friday following the labor market numbers, I feel that US yields will remain supported throughout the next week (the FOMC meeting minutes will be a key event to follow for this.) The US weakness on Friday was likely the result of profit-taking ahead of the US Independence Day.
German/US yield differentials diverged slightly from the exchange rate to the downside.
TECHNICALS
Price-Action:
The EURUSD pair traded with a strong bearish bias in the last week within a well-defined downtrend. On Friday, the price closed after a short retest of a falling trendline, where sellers started to join the market. Another horizontal resistance (Thursday high) can be seen just above the trendline at 1.1885.
Volume:
Trading volume spiked on Friday after the NFP report, but the result in terms of market movement was rather weak. A strong bullish candlestick formed just before the market close on low volume and low liquidity.
== SUMMARY ==
EUR/USD is mildly bearish with the potential to stretch below the 1.18 level during the next week. I would change my short-term bearish bias if the price breaks above the trendline and horizontal resistance (1.1885).
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FUNDAMENTALS:
EUR traded with a heavy bearish bias last week as markets supported the USD ahead of the US labor market report, the weekend, and the US holiday next week. Now that the NFP came in stronger than expected, the EURUSD pair could see further weakness despite the rise in US unemployment rates and pressure on wages.
The FOMC meeting minutes, due on Wednesday, will likely attract attention as markets will follow how hawks and doves are arguing their cases, especially the seven hawks who see the first rate hike in 2022.
In the euroarea, the main highlights for the next week are Sentix and ZEW sentiment reports. Although there are some factors that could lead to EUR strength, the dovish stance of the ECB is likely to provide further selling pressure in the currency, at least until we see some strong hard data from the eurozone.
Latest Headlines:
Here are the latest news headlines for both currencies.
USD News:
- US dollar moving to new lows. Now the weakest of the major currencies
- US factory orders for May 1.7% versus 1.7% estimate
- US stocks are opening higher after less scary jobs report
- US Dollar Index retreats from tops post-Payrolls, back around 92.40
- US Dollar Index Price Analysis: Next on the upside comes in 93.50
- USD needs a much larger surprise on NFP to sustain further gains – TDS
EUR News:
- EUR/USD stages limited rebound after US NFP data, stays near mid-1.1800s
- EUR/USD bounces off fresh lows, retakes 1.1850 post-NFP
- EUR/USD Price Analysis: Looks offered and could slip back to 1.1800
- EUR/USD: Key resistance at 1.1976/2001 to cap even on NFP miss – Credit Suisse
- Eurozone May PPI +1.3% vs +1.2% m/m expected
- EUR/USD stays weak, approaches 1.1800 ahead of Lagarde, NFP
Upcoming Market Reports:
USD: ISM services (Jun), JOLTS jobs openings (May), FOMC Minutes, Initial jobless claims (Jul), Wholesale trade sales, inventories (May)
EUR: Services PMI (Jun), Sentix investor confidence (Jul), ZEW survey (Jul), Retail sales (May), German Industrial Production (May), German Trade, current account (May)
INTERMARKET:
Although the USD and UST yields had a sluggish performance on Friday following the labor market numbers, I feel that US yields will remain supported throughout the next week (the FOMC meeting minutes will be a key event to follow for this.) The US weakness on Friday was likely the result of profit-taking ahead of the US Independence Day.
German/US yield differentials diverged slightly from the exchange rate to the downside.
TECHNICALS
Price-Action:
The EURUSD pair traded with a strong bearish bias in the last week within a well-defined downtrend. On Friday, the price closed after a short retest of a falling trendline, where sellers started to join the market. Another horizontal resistance (Thursday high) can be seen just above the trendline at 1.1885.
Volume:
Trading volume spiked on Friday after the NFP report, but the result in terms of market movement was rather weak. A strong bullish candlestick formed just before the market close on low volume and low liquidity.
== SUMMARY ==
EUR/USD is mildly bearish with the potential to stretch below the 1.18 level during the next week. I would change my short-term bearish bias if the price breaks above the trendline and horizontal resistance (1.1885).
Please hit the 'LIKE' button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
