September started in a relatively calmer mode for the eurusd pair. Results published for the US are showing again some interesting developments. The most important ones are related to the US unemployment and PCE figures. Mostly watched by the Fed, PCE Price Index in the US stood in line with the market estimate in July at 3.3% y/y, while core PCE was 4.2%. It also shows a modest increase in inflation during July. Non-farm Payrolls in August increased above market estimate, reaching 187K, and above 170K projected by the market. Unemployment rate is slowly picking up, beating the market estimate at 3.8% in August, from 3.5% forecasted by the market. From other important indicators, during the previous week CB Consumer confidence, which in August stood at level of 106.1 and below previous months 117. The US GDP estimate for Q2 was 2.1% on a quarterly basis, lower from the market estimate of 2.4%. ISM Manufacturing PMI in August was 47.6, and modestly higher from 46.4 posted for the previous month.
Results published for Germany and the Euro Area during the previous week showed further drop in consumer confidence in Germany as the GFK index dropped to -25.5, above expectations of -24.3. Published preliminary inflation rate for August for Germany was 6.1%, higher from the market estimate of 6.0%. At the same time, Germany's unemployment rate in August stood unchanged from the previous month at a level of 5.7%. Monthly inflation rate in the Euro Area in August was 0.6%, while core inflation rate in August stood in line with forecasted 5.3% on a yearly basis.
Previous week provided some relatively weak volatility for the currency pair. Although there has been short movement toward the level of 1.093, which is the highest weekly level, still, the market ended the week around levels where it stood at the beginning of the week, around 1.077. Selling orders were prevalent during the Thursdays’ and Friday`s trading sessions. The RSI tried to move away from the oversold side, however, it returned to the level of 37, after reaching 50 during the week. Moving averages of 50 and 200 days continue their moves as two parallel lines, not indicating a potential cross in the near future.
Since the beginning of this year, the currency pair is moving in a sort of channel with an uptrend. The pair has again reached the bottom of the channel, imposing a question whether it will finally be a moment for its break. Based on economic indicators, such chances are decreased, considering that both economies have their own issues. In this sense, there is a higher probability for a short term reversal of the currency pair to the upside, at least till the level of 1.10. On the opposite side, if the channel is finally broken, then the pair might head toward the 1.067 support line. However, considering that there are no important fundamentals scheduled for release during the week ahead, the probability for the move toward the downside is decreased.
Important news to watch during the week ahead are:
Euro: GDP Growth rate for Q2 – third estimate for Euro Area, Inflation Rate final for Germany for August,
USD: ISM Services PMI for August
Results published for Germany and the Euro Area during the previous week showed further drop in consumer confidence in Germany as the GFK index dropped to -25.5, above expectations of -24.3. Published preliminary inflation rate for August for Germany was 6.1%, higher from the market estimate of 6.0%. At the same time, Germany's unemployment rate in August stood unchanged from the previous month at a level of 5.7%. Monthly inflation rate in the Euro Area in August was 0.6%, while core inflation rate in August stood in line with forecasted 5.3% on a yearly basis.
Previous week provided some relatively weak volatility for the currency pair. Although there has been short movement toward the level of 1.093, which is the highest weekly level, still, the market ended the week around levels where it stood at the beginning of the week, around 1.077. Selling orders were prevalent during the Thursdays’ and Friday`s trading sessions. The RSI tried to move away from the oversold side, however, it returned to the level of 37, after reaching 50 during the week. Moving averages of 50 and 200 days continue their moves as two parallel lines, not indicating a potential cross in the near future.
Since the beginning of this year, the currency pair is moving in a sort of channel with an uptrend. The pair has again reached the bottom of the channel, imposing a question whether it will finally be a moment for its break. Based on economic indicators, such chances are decreased, considering that both economies have their own issues. In this sense, there is a higher probability for a short term reversal of the currency pair to the upside, at least till the level of 1.10. On the opposite side, if the channel is finally broken, then the pair might head toward the 1.067 support line. However, considering that there are no important fundamentals scheduled for release during the week ahead, the probability for the move toward the downside is decreased.
Important news to watch during the week ahead are:
Euro: GDP Growth rate for Q2 – third estimate for Euro Area, Inflation Rate final for Germany for August,
USD: ISM Services PMI for August
