EURUSD: watch for PCE
Retail Sales in the US were standing at 0% in June on a monthly basis, which was in line with market estimates. Retail Sales excluding autos were higher by 0.4%. Building permits preliminary for June reached the level of 1.446M, which was mostly in line with 1.40M market estimate. Industrial production in June was higher by 0.6% compared to the previous month, and 1.6% on a yearly basis.
The ECB left interest rates unchanged at their meeting during the previous week. This was in line with market expectation. However, in a after-the-meeting speech, ECB President Lagarde noted that there is a potential for another rate cut in September, as the economy of the EuroZone continues to slow down, while the inflation stands at relatively lower levels. As of other economic data posted during the previous week, the ZEW Economic Sentiment Index in the Euro Zone reached 43.7 in July, and missed the market estimate of 48.1. The same indicator for Germany also dropped to the level of 41.8 from 42.5 expected by the market. Core inflation in the Euro Zone final for June remained at 2.9% y/y in line with the previous post. There was also no change in inflation rate, which was standing at 2.5% y/y.
The eurusd currency pair was traded with the uptrend during the whole week, while Friday`s trading session brought some short correction to the downside. The market started the week around level of 1.860 and made a move toward the highest weekly level at 1.0945. The currency pair is ending the week at the level of 1.0896. The RSI modestly touched the overbought market side and reverted back to the level of 61 as of the weekend. Quite interesting development is with MA 50 and 200 lines. As they are moving quite close to each other, a cross might potentially be expected in the coming period. The MA50 line is setting the stage to cross MA200 from the downside, which might be an indication of a trend reversal in the coming period.
During the week the level of 1.09 has been clearly tested for its potential for the upside. However, the market clearly showed that it is too early in time for the 1.10 level. As the overbought market side has been modestly reached, come short term corrections might be expected. In this sense, the market will start the week ahead by testing 1.09 levels. There is a higher probability that this level will be breached to the downside. In this sense, next levels to watch will be 1.0850 eventually 1.08 with a lower probability. It should be considered that the PCE Price index for June is set for a release during the week, which might trigger some short term market volatility.
Important news to watch during the week ahead are:
Euro: GfK consumer Confidence for Germany in August, HCOB Manufacturing PMI flash in July for Germany and the Euro Zone, Ifo business Climate for Germany in July
USD: Durable Goods Orders for Jun, GDP Growth Rate for Q2 first estimate, PCE Price Index in June, Michigan Consumer Sentiment final for July.
The ECB left interest rates unchanged at their meeting during the previous week. This was in line with market expectation. However, in a after-the-meeting speech, ECB President Lagarde noted that there is a potential for another rate cut in September, as the economy of the EuroZone continues to slow down, while the inflation stands at relatively lower levels. As of other economic data posted during the previous week, the ZEW Economic Sentiment Index in the Euro Zone reached 43.7 in July, and missed the market estimate of 48.1. The same indicator for Germany also dropped to the level of 41.8 from 42.5 expected by the market. Core inflation in the Euro Zone final for June remained at 2.9% y/y in line with the previous post. There was also no change in inflation rate, which was standing at 2.5% y/y.
The eurusd currency pair was traded with the uptrend during the whole week, while Friday`s trading session brought some short correction to the downside. The market started the week around level of 1.860 and made a move toward the highest weekly level at 1.0945. The currency pair is ending the week at the level of 1.0896. The RSI modestly touched the overbought market side and reverted back to the level of 61 as of the weekend. Quite interesting development is with MA 50 and 200 lines. As they are moving quite close to each other, a cross might potentially be expected in the coming period. The MA50 line is setting the stage to cross MA200 from the downside, which might be an indication of a trend reversal in the coming period.
During the week the level of 1.09 has been clearly tested for its potential for the upside. However, the market clearly showed that it is too early in time for the 1.10 level. As the overbought market side has been modestly reached, come short term corrections might be expected. In this sense, the market will start the week ahead by testing 1.09 levels. There is a higher probability that this level will be breached to the downside. In this sense, next levels to watch will be 1.0850 eventually 1.08 with a lower probability. It should be considered that the PCE Price index for June is set for a release during the week, which might trigger some short term market volatility.
Important news to watch during the week ahead are:
Euro: GfK consumer Confidence for Germany in August, HCOB Manufacturing PMI flash in July for Germany and the Euro Zone, Ifo business Climate for Germany in July
USD: Durable Goods Orders for Jun, GDP Growth Rate for Q2 first estimate, PCE Price Index in June, Michigan Consumer Sentiment final for July.
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