The euro remains under pressure against the greenback since two weeks. But the price is hovering above crucial support levels. As the market participants focus on Thursday’s ECB interest rate decision the pair remains in a tight trading range.
- The inflation rate in Germany expected to be +0.4% in August 2016.
- Retail turnover in July 2016 in Germany decreased in real terms 1.5% and in nominal terms 1.2%
- Seasonally adjusted August unemployment fell by 7,000 from the previous month.
- Euro area annual inflation is expected to be 0.2% in August 2016, stable compared with July 2016
- NFP: Total nonfarm payroll employment rose by 151,000 in August, compared with an average monthly gain of 204,000 over the prior 12 months. The unemployment rate remained at
Since June, the euro remains in a tight trading range but settles above 20Msma. The September months wrap with ECB policy meeting and FOMC meeting.
The asset markets have read the NFP numbers in a pessimistic way as chances of September rate hike is gradually diminishing. Besides, the greenback finds its ground against eur and JPY.
Goldman Sachs reported in the economic research, “Euro area GDP to expand by +1.5%yoy in 2016, and by +1.3%yoy in 2017”
Market participants are forecast the ECB to keep all three of its interest on hold in September meeting scheduled this week. Draghi expected to remind the inflation is low in the ECB press conference.
Telegraph reported, “Analysts at BNP Paribas said slowing growth in France, Italy and Spain, weak inflation, which remained at 0.2pc in the year to August, and subdued inflation expectations bolstered the case for action sooner rather than later”
IMM data from CFTC’s Commitment of traders report revealed, net short EUR positions increased for the first time in five weeks. Besides net longs USD continued to decrease.
What’s on today?
Germany factory orders forecast 0.4% vs -0.4% month on month basis
EU 2Q GDP forecast 0.3% vs 0.3% and y/y forecast 1.6% vs 1.6%
U.S ISM non-manufacturing PMI forecast 55.1 vs 55.5
Technical view: Post Friday’s NFP outcome the initial spikes push the price to a week high to 1.1250 but spikes ended with a daily loss. Since then, the euro remains in pressures even in the thin trading Monday session but manages to hold the support remains between 1.1130 and 1.1100 levels. The 20Msma finds at 1.1060 levels. The selling pressure accelerates below 1.1090 but the real panic triggers only below 1.1050 to 1.10 and 1.0950 levels.
Alternatively, resistance seems at 1.1180-1.1200, 1.1270 and 1.1360 levels.
Key resistance: 1.1250-1.1270
Key support: 1.1120-1.1090