EURUSD: just a short reversal
The US Durable Goods Orders were increased by 9.9% in July for the month, much higher from forecasted 5%, and certainly better from -6.9% posted for the previous month. Durable goods orders excluding transportation were down by -0.2% for the month. CB Consumer Confidence in August reached 103.3, higher from market estimate of 100.7. GDP Growth Rate, second estimate for Q2 was 3%, a bit better from the market forecast of 2.8%. The PCE Price Index reached 2.5% in July on a yearly basis, a bit lower from market forecast of 2.6%. Core PCE was standing at 2.6% in July, again a bit lower from 2.7% expected by the market. Personal income was increased by 0.3% for the month in July, which was modestly higher from forecasted 0.2%. At the same time, personal spending increased by 0.5% for the month, in line with market expectations. Michigan consumer Sentiment final for August reached 67.9, which was a bit lower from estimated 45.5. On a positive side is that consumers are expecting inflation to slow down further till the end of this year, to the level of 2.8%, which is lower than the previous month, of 2.9%.
The Ifo Business Climate in Germany in August was standing at 86.6, a bit better from forecasted 86, but a bit lower from Julys 87. GDP growth rate final for Q2 in Germany was 0% on a yearly basis, a bit higher from previous estimate of -0.1%. Inflation rate in Germany, preliminary in August is 1.9% on a yearly basis, which was lower from market estimate of 2.1%. Inflation rate for the month was standing at -0.1%. Unemployment rate in Germany remained unchanged in August at 6%. The core inflation in the Euro Zone in August was standing at 2.8%, in line with market estimates, while the inflation rate was higher by 0.2% for the month.
After a strong push to the upside two weeks ago, supported by the Powell`s rhetoric related to potential rate cut in September, the currency pair reverted a bit to the downside, as expected. Although eurusd started the week by testing the 1.12 resistance line, the currency pair ended the week at the level of 1.1047. Two weeks ago, RSI clearly reached the overbought market side, in which sense a short reversal was expected. RSI ended this week around the level of 54, but is still not clearly on the path toward the oversold market side. Moving averages of 50 and 200 days created a cross two weeks ago, indicating a potential for the trend reversal. Two lines spent the previous week diverging further from each other, confirming the cross.
The week ahead might also bring some higher volatility. The non-farm payrolls and unemployment rate in the US are due to be released, which might increase market nervousness in case of any surprises with the data. The currency pair will start the week ahead by testing the 1.10 support line. However, at this moment on charts there is only a small probability that this level will be breached. There is a much higher probability that the currency pair will revert a bit to the upside, at least till the level of 1.11. For higher grounds, there is no clear indication on the chart.
Important news to watch during the week ahead are:
EUR: GDP Growth Rate third estimate for Q2 for the Euro Zone,
USD: ISM Manufacturing PMI for August, ISM Services PMI for August, Non-farm Payrolls, Unemployment Rate for August
The Ifo Business Climate in Germany in August was standing at 86.6, a bit better from forecasted 86, but a bit lower from Julys 87. GDP growth rate final for Q2 in Germany was 0% on a yearly basis, a bit higher from previous estimate of -0.1%. Inflation rate in Germany, preliminary in August is 1.9% on a yearly basis, which was lower from market estimate of 2.1%. Inflation rate for the month was standing at -0.1%. Unemployment rate in Germany remained unchanged in August at 6%. The core inflation in the Euro Zone in August was standing at 2.8%, in line with market estimates, while the inflation rate was higher by 0.2% for the month.
After a strong push to the upside two weeks ago, supported by the Powell`s rhetoric related to potential rate cut in September, the currency pair reverted a bit to the downside, as expected. Although eurusd started the week by testing the 1.12 resistance line, the currency pair ended the week at the level of 1.1047. Two weeks ago, RSI clearly reached the overbought market side, in which sense a short reversal was expected. RSI ended this week around the level of 54, but is still not clearly on the path toward the oversold market side. Moving averages of 50 and 200 days created a cross two weeks ago, indicating a potential for the trend reversal. Two lines spent the previous week diverging further from each other, confirming the cross.
The week ahead might also bring some higher volatility. The non-farm payrolls and unemployment rate in the US are due to be released, which might increase market nervousness in case of any surprises with the data. The currency pair will start the week ahead by testing the 1.10 support line. However, at this moment on charts there is only a small probability that this level will be breached. There is a much higher probability that the currency pair will revert a bit to the upside, at least till the level of 1.11. For higher grounds, there is no clear indication on the chart.
Important news to watch during the week ahead are:
EUR: GDP Growth Rate third estimate for Q2 for the Euro Zone,
USD: ISM Manufacturing PMI for August, ISM Services PMI for August, Non-farm Payrolls, Unemployment Rate for August
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