Last week’s price action appears downside risk and lack of economic events kept the EURUSD tad below 1.20. Undoubtedly GBP was the star last week. After last week’s US CPI data eyeballs are watching closely to FOMC meeting.

 Data Review:

  • Germany CPI rose by 0.1% in August 2017.
  • Germany WPI rose by 0.3% from July 2017 to August 2017.
  • July 2017 Industrial production up by 0.1% in EA, down by 0.3% in EU.
  • EA international trade in goods surplus €23.2 bn.
  • August 2017 EA annual inflation up to 1.5% and up to 1.7% in the EU.

Upcoming data:

Tue, September 19

  • EA July Current account, forecast 22.3B vs 21.2B.

Wed, September 20

  • August Germany PPI forecast 0.1% vs 0.2%.

Thu, September 21

  • ECB publishes Economic Bulletin.

Fri, September 22

  • ECB President Draghi speaks at Trinity College in Dublin, Ireland.
  • EA, France and Germany Flash PMIs

Barclays: We expect euro area flash composite PMIs to edge down from its multi-year high to 55.6. We look for France composite PMI to decline by 0.3 to 54.9, while German composite PMIs should tick up, consistent with very strong forward-looking components in the past month.

  • This Sunday, 24 September 2017 we have German election.

Our main focus over the week ahead will be the FOMC meeting and quarterly Summary of Economic Projections, September 21. Press conference at 2.30PM EST.

Please read the Banks preview: September FOMC meeting.

TECHNICAL VIEW

Last two week’s price action maintaining a consolidation phase between 1.1820 and 1.2100. The overall trend remains bullish and the EUR strength likely to continue to the October meeting.

Compare to EURUSD, the cross EURJPY has a potential to extend the rally to 135 and 138 in the near term.

The recent pullbacks are shallow.  The higher low pattern remains (H4 chart), a break below, then this could confirm the near-term retracement to earlier support base 1.1680-1.1660.

A footprint above 1.20 needed to visit the near term supply zone 1.2070 and 1.2130.

Support base rose to 1.1820 from 1.1660.

View: We believe the EUR dip to be bought to the October meeting. Further headroom available until holds 1.1660.

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

What is your Technical View?

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