The week ahead it is quiet regarding economic data releases. The US data release CPI is the catalyst EURUSD this week. Data wise last week EA GDP fell below market expectations whereas the annual is expected to be at 2.1%.

Data review:

  • EA annual inflation is expected to be 2.1% in July 2018, up from 2.0% in June, according to a flash estimate from Eurostat. In the July ECB meeting, Draghi said “Uncertainty around the inflation outlook is receding. Looking ahead, underlying inflation is expected to pick up towards the end of the year and thereafter to increase gradually over the medium term”.
  • GDP rose by 0.3% in the EA during the second quarter of 2018, compared with the Q1, according to a preliminary flash estimate. That said, Q2 GDP was fell below market expectations.

Recalling Q1 economic health Q1 GDP was moderated to 0.4 %, pull-back from the very high levels of growth in 2017.

Preview: No new important news out this week

Lack of high impact economic events shifting the focus to US data. In the US, we get CPI (Fri). We expect the MoM inflation is reading to print an uptick above 0.2% from 0.1%in June and on an annual basis, it will tick to 3% from 2.9%.

TECHNICAL OVERVIEW

Largely restricted within:

EURUSD has been trading in the recent range 1.1850-1.1500 for five weeks, finally the price break lower. As we pointed a couple of times, the price made a low at 1.1530 its A-B-C corrective structure target.

Though the daily study and oscillator are remaining bearish, we anticipate the price could hold the 1.1530-1.1500 zone ahead of the US catalyst. A daily close below 1.1500 would expose to the immediate support finds at 1.1450. Flip side, in case of a short-term rally 1.1620 and 1.1650 are the nearest destinations to hop off.

A weekly close below 1.1450 would indicate the next destinations at 1.1350 and 1.1230-1.1200 levels.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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