Analysis and Forecast EUR / USD - Weekly review (01-06.06)
A brief summary of May:
The dollar weakened slightly last week, in large part because it was a strong sell out on a pair of EUR / USD. Macroeconomic data from the US were mixed but they were not bad, it may suggest that growth at the end of the week, they are only a short correction before further declines. It should also be noted that the euro has weakened over the entire month against the dollar by 1.89%. Strong impetus for the dollar in May, was due on the one hand by Greece, which is on the verge of bankruptcy. Negotiations on aid to Greece, actually stalled and it should be noted that Greece without the assistance of the EU does not repay in June, more than 1.6 billion euros. The second impulse, which weakens the single currency, there are expectations on interest rate hikes in the US. The market has shifted expectations for the fall in December. In a similar vein they speak as members of the Fed, who quite earnestly trying to explain that the slowdown in the first quarter is temporary and in the near future, the US economy should disperse.
Next week will bring a number of important data and some of them may prove crucial. What do I mean? On Monday we will know the ISM Manufacturing index in the US that if it appears weak or average, may unsettle expectations about interest rate hikes. On Wednesday we will know the ISM index for services in the US. It is not without significance will also be readings from the labor market, which may shed light on the state of the US economy. The market certainly will also follow statements by members of the Fed. On Monday, his speech have Rosengren and Stanley Fisher. On Friday, Dudley will speak.
The market certainly will also keep track of the data that will flow from Europe. On account will deserve PMIs for industry and services, particularly from Germany. Data will be informed whether euro zone's largest economy is beginning to have problems. Not without significance are data on the PMI for the entire Eurozone, and data on inflation. We will also data on retail sales in the Euro zone. The most important figure of the week remains a press conference after the ECB meeting where Mario Draghi will present the current economic situation in the euro zone and the ECB bank's forecast for the future. At the end of Friday we will know the data on industrial orders in Germany.
Forecast for Monday:
The currency pair after selling out quite strong and reached a low of 1.0818 currently corrects declines. At the moment, we find ourselves at the level of 1.0989. In my opinion, the growth may stop in the vicinity of strong resistance at the level of 1,1040-1060 that in March constituted a strong barrier, which demand could not cope. This level coincides with the 61.8% fibo declines from 1.1208 to 1.0818. However, before the market reaches the aforementioned resistance, should first deal with the level of 1.10. In my opinion this is the maximum range of adjustment. In a broader horizon remains the preferred option further declines.
In an alternate embodiment reaches the test zone decreases without resistance.
Note: The currency pair is under pressure. The most important data will flow from the US - ISM index for the industry.
The dollar weakened slightly last week, in large part because it was a strong sell out on a pair of EUR / USD. Macroeconomic data from the US were mixed but they were not bad, it may suggest that growth at the end of the week, they are only a short correction before further declines. It should also be noted that the euro has weakened over the entire month against the dollar by 1.89%. Strong impetus for the dollar in May, was due on the one hand by Greece, which is on the verge of bankruptcy. Negotiations on aid to Greece, actually stalled and it should be noted that Greece without the assistance of the EU does not repay in June, more than 1.6 billion euros. The second impulse, which weakens the single currency, there are expectations on interest rate hikes in the US. The market has shifted expectations for the fall in December. In a similar vein they speak as members of the Fed, who quite earnestly trying to explain that the slowdown in the first quarter is temporary and in the near future, the US economy should disperse.
Next week will bring a number of important data and some of them may prove crucial. What do I mean? On Monday we will know the ISM Manufacturing index in the US that if it appears weak or average, may unsettle expectations about interest rate hikes. On Wednesday we will know the ISM index for services in the US. It is not without significance will also be readings from the labor market, which may shed light on the state of the US economy. The market certainly will also follow statements by members of the Fed. On Monday, his speech have Rosengren and Stanley Fisher. On Friday, Dudley will speak.
The market certainly will also keep track of the data that will flow from Europe. On account will deserve PMIs for industry and services, particularly from Germany. Data will be informed whether euro zone's largest economy is beginning to have problems. Not without significance are data on the PMI for the entire Eurozone, and data on inflation. We will also data on retail sales in the Euro zone. The most important figure of the week remains a press conference after the ECB meeting where Mario Draghi will present the current economic situation in the euro zone and the ECB bank's forecast for the future. At the end of Friday we will know the data on industrial orders in Germany.
Forecast for Monday:
The currency pair after selling out quite strong and reached a low of 1.0818 currently corrects declines. At the moment, we find ourselves at the level of 1.0989. In my opinion, the growth may stop in the vicinity of strong resistance at the level of 1,1040-1060 that in March constituted a strong barrier, which demand could not cope. This level coincides with the 61.8% fibo declines from 1.1208 to 1.0818. However, before the market reaches the aforementioned resistance, should first deal with the level of 1.10. In my opinion this is the maximum range of adjustment. In a broader horizon remains the preferred option further declines.
In an alternate embodiment reaches the test zone decreases without resistance.
Note: The currency pair is under pressure. The most important data will flow from the US - ISM index for the industry.