We are not very negative on the EURUSD outlook this week.
We are a couple of days away to FOMC June meeting on June 18-19. However, also, we must focus on Draghi speech at the ECB conference on Wednesday. The return of USD weakness, which should allow EM FX to perform better. This pushing EURUSD higher ahead of June FOMC meeting.
Last week, the euro climb to two-month high as the over-loved USD struggles. Besides the May US employment report on Friday was mixed. EURAUD, EURJPY, and EURNZD were among major gainers on the euro crosses while the loser was EURCAD.
Review of the previous week data:
- EZ Manufacturing economy continues to contract in May whereas service sector saw the continued expansion, according to the official data.
- Manufacturing PMI further down to 47.7 in May vs 47.9 in April.
- Service sector index recorded 52.9 a little higher than April’s 52.8.
- EA annual inflation down from 1.7% in April to 1.2% in May.
- ECB delivered a dovish message in last week’s meeting. The latest round of staff projections showed only a minor change to the March projections.
Looking at the week ahead, it will not be a busy week in terms of EA data but worth to focus on US CPI data.
The single currency traded with positive bias throughout the week and managed to close above significant hurdle of 100MA places around 1.1270 and 1.1325 earlier swing high. Bullish crossover in RVI and higher RSI indicates positivity in EURUSD. Any decisive move above last weeks high 1.1350 will push the euro further higher towards 1.1370 its 200Mas, 1.1400 it’s 50MA (Weekly) and 1.1445 mid-March high. While close below the active support zone of 1.1215-1.1200 will change the current theme.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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