EUR/USD Price Forecast – Euro Pulls Back Finally

The Euro has initially tried to rally during the trading session on Monday but found the 1.18 level to be a bit too much, and then pulled back towards the 1.17 level. This is an area that will probably cause some support, but quite frankly it still a bit elevated. I think at this point we need to see the Euro consolidate a bit if nothing else.

EUR/USD Video 04.08.20

That being said, I do not like the idea of shorting this pair regardless. Even if we break down below the 1.17 level, it is very likely that we will find plenty of buyers underneath. In fact, I think there is a lot of support all the way down to the 1.15 level, so I am hoping to see a little bit more of a deeper correction and then take advantage of it.

To the upside I believe that we are going to go looking towards the 1.20 level eventually, but quite frankly I do not think that we get there overnight. This is a market that has been overbought for some time, so I think the healthiest thing we can do is either consolidate or pull back. After all, markets cannot go in one direction forever, despite the fact that they often tried to. I believe that the 1.15 level is now the “floor” in the market, and therefore I have no interest in shorting until we get well below that important figure.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Mid-Session Technical Analysis for August 3, 2020

The Euro is trading lower on Monday as a squeezing-out of crowded short U.S. Dollar positions combined with safe-haven demand is driving investors into the greenback following its weakest monthly performance in ten years.

In other news, manufacturing activity across the Euro Zone expanded for the first time since early 2019 last month as demand rebounded after more easing of the restrictions imposed to quell the spread of the new coronavirus, a survey showed on Monday.

At 12:40 GMT, the EUR/USD is trading 1.1732, down 0.0040 or -0.33%.

Factories appear to be playing their part in the recovery in the Euro Zone. IHS Markit’s final Manufacturing Purchasing Managers’ Index bounced to 51.8 in July from June’s 47.4 – its first time above the 50 mark that separates growth from contraction since January 2019. An initial “flash” release had it at 51.1.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, Friday’s closing price reversal top and subsequent follow-through to the downside has shifted momentum to the downside. This could trigger a 2 to 3 day correction of between 50% and 61.8% of the last rally.

The minor trend is also up. A trade through 1.1371 will change the minor trend to down and confirm the shift in momentum.

The minor range is 1.1371 to 1.1909. Its retracement zone at 1.1640 to 1.1577 is the first downside target zone.

The main range is 1.1185 to 1.1909. Its retracement zone at 1.1547 to 1.1462 is the primary downside target zone.

Combining the two retracement zones creates a price cluster at 1.1577 to 1.1547. This zone also represents value so it should be attractive to buyers if tested.

Daily Swing Chart Technical Forecast

The closing price reversal top is not a change in trend, but often used as a means to alleviate some of the excessive upside pressure.

Our work suggests a 2 to 3 correction is likely with 1.1640 to 1.1577 the first downside target zone. Since the main trend is up, buyers are likely to show up on a test of this level.

The EUR/USD should hit 1.1640 to 1.1577 if the downside momentum continues. If the downside momentum pauses or shifts back up then look for a retracement of the first leg down. This price is approximately 1.1812.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Dollar Rebound Holds Euro Below 1.1800

EUR/USD briefly traded above 1.1900 on Friday but has since eased back as the dollar is rebounding broadly against its major currency counterparts.

Considering that the exchange rate has risen at a much more rapid pace than the norm, it would not be unusual to see a consolidation at this point, or a slight correction lower.

Economic data from Europe was positive today. The latest manufacturing PMI report showed the industry returning to growth after a steep contraction in the second quarter.

The report confirms that the euro area is well on its way to a recovery as the easing of lockdown restrictions has boosted the economy compared to prior months. However, things are still in the early stages and this momentum will need to continue for the economy to eventually get back to the state it was before the virus shock.

The labor market is the biggest risk when it comes to factors that could derail the recovery. For this reason, the next employment report, scheduled for release next week, will be closely watched.

Later today, the US will release data that will provide an outlook on the US manufacturing sector. Similar to the euro area, analysts expect the manufacturing sector to show growth in July.

Technical Analysis

EURUSD 4-Hour Chart

The currency pair shows signs of slowing but there is risk in taking a counter-trend stance, especially in the case of EUR/USD where the recent upward trend has had a lot of momentum behind it.

It might take a further development in price action to determine if the dollar bounce will turn in anything meaningful.

For the session ahead, the 1.1735 level appears to be significant. The price point stems from a weekly chart where it has acted as both support and resistance in the past.

A sustained move below it could clear the path for a broader correction. Considering the trend, buyers may look to defend the level. It may take a move above 1.1850 for the upward momentum to return.

Bottom Line

  • Economic data from the euro area was positive although the exchange struggled to gain following the report.
  • The level to watch in the session ahead is 1.1735. It can act as a line in the sand for a directional bias for today’s session.
  • The US will release it’s latest manufacturing PMI data in early North American trading.

For a look at all of today’s economic events, check out our economic calendar.

The COVID-19 Stimulus Package and Manufacturing PMIs Put the Dollar and EUR in Focus

Earlier in the Day:

It’s was a busy start to the day on the economic calendar this morning.  The Japanese Yen and the Aussie Dollar were in action, with economic data from China also in focus.

Away from the economic calendar, COVID-19 and the U.S stimulus package continued to be an area of focus.

Looking at the latest coronavirus numbers

According to figures at the time of writing, the number of new coronavirus cases rose by 249,532 to 18,231,469 on Sunday. On Saturday, the number of new cases had risen by 250,087. The daily increase was lower than Saturday’s rise while up from 213,347 new cases from the previous Sunday.

Germany, Italy, and Spain reported 623 new cases on Sunday, which was down from 707 new cases on Saturday. On the previous Saturday, 663 new cases had been reported.

From the U.S, the total number of cases rose by 50,702 to 4,813,647 on Sunday. On Saturday, the total number of cases had increased by 60,171. On Sunday, 26th July, a total of 56,130 new cases had been reported.

For the Japanese Yen

Finalized GDP numbers for the 1st quarter remained unchanged from 2nd estimates. In the 1st quarter, the Japanese economy contracted by 0.6%, following a 1.9% contraction in the 4th quarter.

On an annualized basis, the economy contracted by 2.2%, which was also in line with 2nd estimates. In the 4th quarter, the economy had contracted by 7.3%.

The Japanese Yen moved from ¥105.858 to ¥105.844 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.07% to ¥105.90 against the U.S Dollar.

For the Aussie Dollar

The AIG Manufacturing Index rose from 51.5 to 53.5 in July.

According to the July Survey,

  • The sector expanded for a 2nd consecutive month, a first since October of last year.
  • The food & beverage and machinery & equipment sectors delivered much-needed support in the month.
  • In spite of the expansion, there was continued weakness across the other sectors.
  • Production, employment, supplier deliveries, and finished stocks expanded at a faster rate than in June, however.

The Aussie Dollar moved from $0.71412 to $0.71423 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.14% to $0.7133.

Out of China

In July, the Caixin Manufacturing PMI rose from 51.2 to 52.8. Economists had forecast a rise to 51.3.

According to the July survey,

  • New business from overseas fell at the slowest rate in 6-months, as new orders rose at the quickest pace since Jan-11.
  • Companies also reported the quickest expansion in output since January 2011.
  • Output expanded for a 5th consecutive month, driven by greater client demand as the economic recovery gathered pace.
  • Manufacturers ramped up their buying activity, the rate of expansion the most marked in seven-and-a-half years.
  • In spite of a rise in backlogs and new orders, firms cut staffing levels again in July.

The Aussie Dollar moved from $0.71303 to $0.71366 upon release of the figures.

Elsewhere

At the time of writing, the Kiwi Dollar up by 0.02% to $0.6630.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats include July manufacturing PMI figures for Spain and Italy.

Finalized manufacturing PMIs are also due out of France, Germany, and the Eurozone.

Barring a marked revision to Germany’s numbers, we would expect Italy and the Eurozone’s PMIs to have the greatest impact.

Following some quite dire 2nd quarter GDP numbers last week, a further pickup in manufacturing sector activity would be welcome.

At the time of writing, the EUR was down by 0.07% to $1.1770.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. July’s finalized manufacturing PMI is due out later this morning.

Barring any revisions, however, the PMI should have a muted impact on the Pound.

Chatter on Brexit and market risk sentiment will influence, as will updates on the latest COVID-19 outbreak.

At the time of writing, the Pound was up by 0.02% to $1.3088.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar. July’s ISM Manufacturing PMI and finalized Markit Manufacturing PMI figures are due out.

Expect the ISM figures to have the greatest impact on the day. The employment and new orders sub-indexes will likely garner plenty of interest.

Away from the calendar, the focus will remain on Capitol Hill and the progress of the COVID-19 stimulus package.

At the time of writing, the Dollar Spot Index was up by 0.16% to 93.499.

For the Loonie

It’s a quiet day ahead on the economic calendar, with no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment and the PMI numbers on the day.

At the time of writing, the Loonie was up by 0.03% to C$1.3408 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

Euro Area Safe Assets to Rise by Almost EUR 2.5trn Over Coming Years, Boosting the Euro’s Standing

The European fiscal response to the Covid-19 crisis – including national and EU-wide counter-cyclical fiscal stimulus – will indeed increase the availability of euro-denominated safe assets in coming years by almost EUR 2.5trn, an increase of about 50%.

“We expect the combined national and European fiscal response to the Covid-19 shock to increase the availability of highly rated euro-denominated securities from around EUR 5trn in 2019 to almost EUR 7.5trn by 2024,” says Alvise Lennkh, deputy head of sovereign and public sector ratings at Scope.

“The scarcity of euro-denominated safe assets particularly relative to the depth of the markets for US Treasuries and Japanese government bonds has been on the academic and political agenda since the global financial and sovereign debt crises,” says Lennkh.

“The coming significant jump in issuance, which will result in higher public debt levels overall, may boost the euro’s credentials as a global reserve currency,” he says.

Two drivers for the increase in euro-denominated safe assets

There are two main drivers for the increase in euro-denominated safe assets:

  • An estimated increase in debt securities by highly rated sovereign governments by around EUR 1.6trn, driven by France (~EUR 700bn) and Germany (~EUR 600bn); and
  • Issuance at the supranational level, particularly from the European Commission, will increase significantly to fund the “Next Generation EU” recovery plan (EUR 750bn) and the SURE unemployment scheme (EUR 100bn) over the coming years.

Much higher levels of government and supranational debt are to be expected, albeit financed at lower cost, mostly driven by the ECB’s crisis response, which will result in greater interdependence between the ECB and euro area member states given the increasing share of sovereign bonds on the ECB’s balance sheet.

In addition, the greater supply of euro-denominated area safe assets, particularly those issued by the EU, could address some of the adverse effects resulting from the shortage of safe asset supply in the euro area, notably banks holding large portions of domestic sovereign bonds on their balance sheets, which could now diversify some of their sovereign bond holdings, possibly reducing the vicious so-called doom loop in sovereign debt crises.

Benefits should, however, not be overstated at this stage

However, the benefits should not be overstated at this stage as EU issuance amounts only to slightly above 5% of EU-27 GDP. Still, having a deeper pool of euro area safe assets may affect sovereign creditworthiness in various ways.

“A sufficiently high supply of highly rated euro-denominated bonds would facilitate integration between the still-fragmented financial systems and ensure liquid markets for refinancing.”

Implications of enhanced reserve currency status for euro area sovereigns include the prospect of more limited exchange-rate risks and reduced government borrowing costs, and thus the ability to increase spending without materially raising debt-sustainability concerns.

For a look at all of today’s economic events, check out our economic calendar.

Read the full Scope Ratings report at this link.

Alvise Lennkh is the Deputy Head of Sovereign and Public Sector ratings at Scope Ratings GmbH.

The Week Ahead – COVID-19, Economic Data and US Politics in Focus

On the Macro

It’s a busier week ahead on the economic calendar, with 59 stats in focus in the week ending 7th August. In the week prior, just 57 stats had been in focus.

For the Dollar:

It’s another busy week ahead on the economic data front.

In the 1st half, the ISM’s July private sector PMIs, ADP nonfarm employment change figures, and June factory orders are in focus.

We would expect Wednesday’s ISM Non-Manufacturing PMI and ADP Nonfarm Employment Change to have the greatest impact.

The focus will then to Thursday’s initial jobless claims and Friday’s nonfarm payroll numbers and unemployment rate.

Following some disappointing weekly jobless claims figures and the rise in COVID-19 cases, the labor market figures will be key.

For the service sector, any contraction in July, following a jump in productivity in June, would also weigh on riskier assets.

The Dollar Spot Index ended the week down by 1.15% to 93.349.

For the EUR:

It’s also another busy week ahead on the economic data front.

On Monday and Wednesday, July’s manufacturing and services PMIs are due out of Italy and Spain.

Finalized PMIs are also due out of France, Germany, and the Eurozone.

With Spain seeing a spike in new COVID-19 cases, expect some attention to the PMIs. Ultimately, however, the Eurozone’s services and composite will likely have the greatest impact.

The focus will then shift German factory orders for June, due out on Thursday.

At the end of the week, Germany remains in focus, with June’s industrial production and trade figures due out.

Barring disappointing numbers, June retail sales figures for the Eurozone should have a muted impact on Thursday.

The EUR/USD ended the week up by 1.05% to $1.1778.

For the Pound:

It’s a relatively busy week ahead on the economic calendar. July’s finalized private sector PMIs are due out and will garner plenty of interest.

Expect any downward revision to the Services PMI on Wednesday to have the greatest impact.

On Thursday, the focus will then shift to the BoE. More action is expected and the Bank may consider an extension to the suspension of banks paying dividends and buybacks.

While the BoE is in action, we can also expect any further updates on Brexit to also influence in the week.

The GBP/USD ended the week up by 2.27% to $1.3085.

For the Loonie:

It’s a relatively busy week ahead on the economic calendar.

On Wednesday, June’s trade figures are due out ahead of July employment numbers on Friday.

Expect the employment figures to have the greatest impact, however.

Barring dire numbers, the Ivey PMI for July should have a muted impact on the Loonie on Friday.

Away from the stats, COVID-19 and geopolitics will continue to influence crude oil prices and risk sentiment.

The Loonie ended the week up by 0.02% to C$1.3412 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively busy week ahead for the Aussie Dollar.

At the start of the week, the Manufacturing Index figures are due out ahead of a busy Tuesday.

We would expect manufacturing PMIs from China, the EU, and the U.S to have a greater impact, however, on Monday.

The focus will then shift June trade and retail sales figures due out on Tuesday. Expect the retail sales figures to have the greatest impact. The RBA continues to rely on consumer spending to support the economy. Weak numbers will be a test for the Aussie Dollar.

For the week, however, the main event is the RBA monetary policy decision on Tuesday.

Following the spike in new COVID-19 cases, will the RBA remain optimistic about the economic recovery?\

Any dovish chatter and the Aussie Dollar could eye sub-$0.70 levels. At the end of the week, the RBA’s statement on monetary policy will also draw interest.

The Aussie Dollar ended the week up by 0.53% to $0.7143.

For the Kiwi Dollar:

It’s another quiet week ahead on the economic calendar.

2nd quarter employment figures are due out on Wednesday. The markets will likely be forgiving to an extent, with COVID-19 expected to have an impact on employment.

With economic data on the lighter side, private sector PMIs from China, the EU, and the U.S will influence.

Expect geopolitics and COVID-19 news to also have an impact in the week. Any signs of a slowdown in new cases globally and expect support to kick in.

The Kiwi Dollar ended the week down by 0.18% to $0.6629.

For the Japanese Yen:

It is a busy week ahead on the economic calendar.

Finalized 2nd quarter GDP and July’s manufacturing PMI numbers are due out on Monday.

The focus will then shift to July’s service PMI on Wednesday and June household spending figures on Friday.

While the stats will influence sentiment towards BoJ monetary policy, the Yen will remain at the mercy of COVID-19 and geopolitics.

The Japanese Yen ended the week up by 0.29% to ¥105.83 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead on the economic data front.

July’s private sector PMIs are due out on Monday and Wednesday. Expect the figures to influence risk appetite in the week.

On Friday, July trade figures will also garner plenty of attention. While exports remain the main area of focus, any sizeable fall in imports would test risk appetite on the day.

Away from the economic calendar, any chatter from Beijing will also need monitoring.

The Chinese Yuan ended the week up 0.62% to CNY6.9752 against the U.S Dollar.

Geo-Politics

UK Politics:

Brexit will remain in focus. Talks are set to continue through August and September ahead of an EU Summit in October.

60 days may sound like a lot but when considering the lack of progress over 4-years…

A light economic calendar and Brexit chatter have provided the Pound with support. We may even see the markets brush off the chances of a hard Brexit.

Getting on with it seems to be the key desire now rather than dragging it out any longer. Either way, we’re not expecting Johnson and the team to give too much away…

U.S Politics:

Last week, the Republicans showed signs of fragmentation. As Presidential Election stress builds, we could see more fractures as Trump attempts to distract voters.

The immediate issue at hand, however, is the COVID-19 stimulus package. Any failure to deliver will weigh on the Dollar. Labor market conditions have not improved and the 2nd wave has shown little sign of slowing. A lack of benefits for the unemployed will raise more issues than a fall in household spending. We have already seen social unrest…

The Coronavirus:

It was yet another bad week, with the number of new COVID-19 cases continuing to rise at a marked pace.

From the market’s perspective, the 3 key considerations have been:

  1. Progress is made with COVID-19 treatment drugs and vaccines.
  2. No spikes in new cases as a result of the easing of lockdown measures.
  3. Governments continue to progress towards fully opening economies and borders.

Last week, we saw a number of countries including Hong Kong and the UK reintroduce containment measures. Hopes of progress towards a vaccine had limited the damage last week. In the week ahead, however, the numbers will need to ease off to avoid spooking the markets.

At the time of writing, the total number of coronavirus cases stood at 17,981,937. Monday to Saturday, the total number of new cases increased by 1,782,490. Over the same period in the previous week, the total number had risen by 1,531,149.

Monday through Saturday, the U.S reported 447,236 new cases to take the total to 4,762,945. This was up marginally from the previous week’s 417,070

For Germany, Italy, and Spain, there were 22,814 new cases Monday through Saturday. This took the total to 793,804. In the previous week, there had been 17,083 cases over the same period. Spain accounted for 16,101 of the total new cases in the week.

The Weekly Wrap – Economic Data, the FED, and Trump Sank the Dollar

The Stats

It was a busy week on the economic calendar, in the week ending 31st July.

A total of 56 stats were monitored, following the 41 stats from the week prior.

Of the 56 stats, 31 came in ahead forecasts, with 24 economic indicators coming up short of forecasts. Just 1 stat was in line with forecasts in the week.

Looking at the numbers, 19 of the stats reflected an upward trend from previous figures. Of the remaining 37, 35 stats reflected a deterioration from previous.

For the Greenback, it was a 6th consecutive week in the red. In the week ending 31st July, the Dollar Spot Index fell by 1.15% to 93.349. In the week prior, the Dollar had fallen by 1.57%.

The continued slide through the month of July left the Dollar Spot Index down by 4.15% for the month.

Dire economic data, the continued spread of COVID-19, and a dovish FED delivered the loss. Adding to the Dollar angst in the week was Trump’s Presidential Election delay tweet on Thursday…

According to a Reuters report, U.S Dollar net shorts surged to the highest in 9-years, delivering the largest monthly loss Since Sept-2010.

Looking at the latest coronavirus numbers

At the time of writing, the total number of coronavirus cases stood at 17,731,750 for Friday, rising from last Friday’s 15,930,779 total cases. Week-on-week (Saturday thru Friday), the total number of cases was up by 1,801,071 on a global basis. This was higher than the previous week’s increase of 1,741,556 in new cases.

In the U.S, the total rose by 454,463 to 4,702,774. In the week prior, the total number of new cases had risen by 478,299.

Across Germany, Italy, and Spain combined, the total number of new cases increased by 22,753 to bring total infections to 793,804. In the previous week, the total number of new cases had risen by 17,404. Spain alone reported 16,101 new cases in the week.

Out of the U.S

It was a busy week on the economic data front.

Key stats included July consumer confidence, the weekly jobless claims, and 2nd quarter GDP figures.

The stats were skewed to the negative. Consumer confidence deteriorated in July, as a result of the 2nd wave of the pandemic. Initial jobless claims increased for a 2nd consecutive week, with the U.S economy contracting by 32.9% in the 2nd quarter.

At the end of the week, July consumer sentiment figures were also revised down.

There were some positives, however. Durable and core durable goods continued to rise in June.

Chicago’s PMI returned to expansion in July, with personal spending rising for a 2nd consecutive month in June. These were good enough to give the Dollar much-needed support at the end of the week.

In the equity markets, the NASDAQ and S&P500 rose by 3.69% and by 1.73% respectively. The Dow bucked the trend, however, falling by 0.16%.

Out of the UK

It was a particularly quiet week on the economic calendar, with no material stats to provide the Pound with direction.

A lack of economic data contributed to the upside in the Pound that benefitted from Dollar weakness. News of the government reintroducing lockdown measures in the North weighed at the end of the week, however.

In the week, the Pound rallied by 2.27% to $1.3085 in the week, following on from a 1.80% gain from the previous week. The FTSE100 ended the week down by 3.69%, following on from a 2.65% loss from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

In a quiet 1st half of the week, Germany’s IFO Business Climate Index figures for July provided support on Monday.

The focus then shifted to 2nd quarter GDP numbers. France, Germany, and the Eurozone reported particularly dire 2nd quarter numbers.

The German economy contracted by 10.1%, the French economy by 13.8%, and the Eurozone economy by 12.1%.

It wasn’t enough to send the EUR into the red, however, as the U.S delivered darker numbers.

For the week, the EUR rose by 1.05% to $1.1778, following a 2.00% rally from the previous week. A 0.58% pullback on Friday limited the upside for the week.

For the European major indexes, it was another bearish week. The DAX30 slid by 4.09%, with the CAC40 and EuroStoxx600 falling by 3.49% and by 2.98% respectively.

For the Loonie

It was a quiet week on the economic calendar.

Economic data included May GDP and June RMPI numbers at the end of the week.

The stats were positive, with the Canadian economy expanding by 4.5% in May, following April’s 11.7% contraction. In June, the RMPI rose by a further 7.5%, following a 16.4% jump in May.

While the other majors lost ground against the Greenback on Friday, the stats delivered support at the end of the week.

The Loonie rose by 0.02% to end the week at C$1.3412 against the Greenback. In the week prior, the Loonie had rallied by 1.22% to C$1.3415.

Elsewhere

It was a mixed week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 31st July, the Aussie Dollar rose by 0.53% to $0.7143, while the Kiwi Dollar fell by 0.18% to $0.6629. A 1.04% slide on Friday, left the Kiwi in the red for the week.

For the Aussie Dollar

It was a relatively quiet week for the Aussie Dollar.

Inflation and private sector credit figures delivered mixed results in the week.

In the 2nd quarter, consumer prices slid by 1.9%, with prices down by 0.30% year-on-year.

Final delivery numbers were not much better, with the Producer Price Index falling by 1.20% in the 2nd quarter. Year-on-year, the index fell by 0.40%.

The numbers were better than forecasts, which propped up the Aussie Dollar.

Private sector credit disappointed, however, falling by 0.3% in June.

While the Aussie Dollar found support against the Greenback, the latest COVID-19 outbreak pinned back the Aussie.

For the Kiwi Dollar

It was another relatively quiet week on the economic data front.

While stats included building consent and business confidence figures, the focus was on the business confidence figures.

A marginal improvement in business confidence did little to support the Kiwi, however.

In July, the ANZ Business Confidence Index rose from -34.4 to -31.8.

According to the latest ANZ Report,

  • A net 9% of firms expect weaker economic activity in their own business, rising from -26% in June.
  • The retail sector drove the recovery, while the agriculture sector was the most negative.
  • 31% of firms say they intend to lay off staff, and 24% say they have less staff than a year ago.

For the Japanese Yen

It was a relatively quiet week on the economic calendar.

Retail sales continued to fall in June. Following a 12.5% slump in May, retail sales fell by 1.20%.

Industrial production delivered hope, however, rising by 2.7% in June, according to prelim figures. In May, production had tumbled by 8.9%.

A weakening U.S Dollar stemming from particularly dire economic data and a dovish FED supported the Yen.

The Japanese Yen rose by 0.29% to end the week at ¥105.83 against the Greenback. A 1.05% slide on Friday, cut the gains from earlier in the week. In the week prior, the Yen had risen by 0.82%.

Out of China

It was a quiet week on the economic data front.

July’s NBS private sector PMI figures delivered mixed results on Friday.

While the Non-Manufacturing PMI slipped from 54.4 to 54.2, the Manufacturing PMI rose from 50.9 to 51.1.

With Beijing and Washington silent, following the previous week’s diplomatic spat, the Yuan recovered to sub-CNY7 levels.

In the week ending 24th July, the Chinese Yuan rose by 0.62% to CNY6.9752 against the Dollar. In the week prior, the Yuan had fallen by 0.37%.

The CSI300 rallied by 4.20%, while the Hang Seng falling 0.45%, as a 2nd wave of the pandemic hit HK.

EUR/USD Mid-Session Technical Analysis for July 31, 2020

The Euro is trading lower late Friday after erasing nearly half of its weekly gains in a matter of hours. This followed a rally to its highest level since May 2018. The price action suggests end of the month profit-taking and position-squaring is behind the move because no major news events were announced.

If you’re looking to blame something, blame Washington’s inability to come to an agreement over coronavirus relief. On Friday, Republicans and Democrats made little progress toward a coronavirus relief deal as economic data show an economy still reeling from the coronavirus pandemic.

According to CNBC, Democrats have rejected the possibility of passing a short-term extension while the sides negotiate a broader deal. Meanwhile Republicans started to float a short-term fix this week after they released their aid proposal on Monday, more than two months after Democrats passed their rescue bill in the House.

At 18:34 GMT, the EUR/USD is trading 1.1796, down 0.0052 or -0.44%.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out the previous day’s high.

The main trend will change to down on a move through 1.1185. This is highly unlikely by the market is in a position to form a daily closing price reversal top that could trigger the start of a 2 to 3 day correction if confirmed on Monday.

The minor range is 1.1371 to 1.1909. Its 50% level at 1.1640 is a potential downside target. Since the main trend is up, buyers are likely to come in on a test of this level.

The main range is 1.1185 to 1.1909. Its retracement zone at 1.1547 to 1.1462 represents value. A test of this zone is likely to attract even stronger buyers.

Short-Term Outlook

Due to the prolonged move up in terms of price and time, the possibility of a closing price reversal top isn’t a surprise.

The key level to watch into the close is Thursday’s close at 1.1848. A close under this level will form the daily closing price reversal top. If confirmed on Monday then look for the start of a 2 to 3 day correction with the minor 50% level at 1.1640 the minimum downside target.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Weekly Price Forecast – Euro Smashes Through Barriers

The Euro shot through couple of barriers during the week, breaking through the 1.17 level, the 1.18 level, and even threatening the 1.19 level. The way we have done this, it has been quite impressive, but I think eventually we will regain all of this territory after a pullback. The pullback is something that is desperately needed, and therefore it is likely that we will see buyers come in to pick up value when it occurs. The 1.15 level is now your absolute floor in the market, as I think the trend has most certainly changed.

EUR/USD Video 03.08.20

The candlestick is somewhat impressive, but it is likely that we are going to continue to see plenty of people acknowledge the fact that the Federal Reserve is flooding the markets with greenback and therefore it is likely that we will continue to see the Euro continue to go higher longer term. We are seen a major trend change and therefore there are plenty of people waiting to see a bit of value appear so that they can take advantage of this massive change.

The trend in FX tends to last quite some time, so even if we do get a bit of a pullback, I think that there will be plenty of people willing to take advantage of that value. I have no interest in shorting the Euro, it has shown us just how explosive it is at the moment, and with the US dollar losing so much strength, it makes quite a bit of sense that we would see a bit of a cool off before we move in the same direction again.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Finally Recognizing a Bit of Gravity

The Euro is obviously in an uptrend. That in and of itself should not be a major surprise, considering that we have been parabolic for quite some time. However, gravity eventually has its say and it looks to me like the Euro is starting to look at it. Ultimately, the market is in desperate need of some type of pullback in order to offer value, and I think we could start to see that. At this point, I believe that the 1.17 handle would be a nice target, and then after that the 1.15 handle would be my next area of extreme interest.

EUR/USD Video 03.08.20

We could see a market break above the shooting star shaped candlestick and above the 1.19 level at this point, but quite frankly that would make things even more dangerous. Do not be surprised at all to see a couple of handles drop in this market, but at that point I will be looking for some type of value investment. I will revisit the Euro at the end of every day and see what it is telling me, but right now it is telling me that it is profit-taking time heading into the weekend. This is not a sellable event, rather it is an event that will give you an opportunity to pick up Euros “on the cheap.” With that in mind, a little bit of patience will go a long way. Remember, it is not about pressing buttons, it is about making money.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Euro Set to Post Largest Monthly Gain in Nearly a Decade

EUR/USD has rallied about 5.5% this month, which is the largest month over month gain since September 2010. The pair now faces resistance from its 100-month moving average, an indicator it has not tested since early 2018.

Both the British pound and the single currency show similar gains and are the top performers among the majors while the dollar has been the weakest.

Over the past 15 sessions, EUR/USD has rallied in 13 of them.

The pair was initially boosted by progress in a new European stimulus program. A persistently weaker dollar has also been a big driver. The greenback has been steadily offered through the month as risk appetite among investors has been strong.

Economic data from Europe was mixed today. The contraction in GDP for France and Italy was less than expected in the second quarter. The Spanish economy, on the other hand, contracted more than analysts were estimating.

GDP for the euro area as a whole was reported to contract 12.1% which is a tick more than the forecast. Annual inflation in the euro area rose to 0.4% from 0.3% and against the forecast for a rise of 0.3%.

Technical Analysis

EURUSD Monthly Chart

The 100-month average is considered a major hurdle for the currency pair and it may cap gains going into the monthly close.

Upward momentum remains prevalent although has slowed somewhat in the second half of the week.

In addition to the overhead resistance in the currency pair, The inversely correlated dollar index (DXY) is bouncing off a major support level.

DXY reached a low earlier today near a level that acted as resistance back in early 2006. This same area also provided support from the middle of 2015 until the start of 2018.

Considering that the movements in EUR/USD and the dollar in general are stretched by any measure, the technical area mentioned could trigger a dollar bounce.

Bottom Line

  • EUR/USD reached fresh 2-year highs above 1.1900 earlier in the day.
  • GDP data from the US released yesterday showed a contraction of 32.9% in the second quarter which was slightly better than expected.

For a look at all of today’s economic events, check out our economic calendar.

The U.S Dollar Slide Continues on a Busy Day of Stats and Updates from Capitol Hill

Earlier in the Day:

It’s was another busy start to the day on the economic calendar this morning. The Japanese Yen and the Aussie Dollar were in action, with economic data from China also of influence.

Away from the economic calendar, COVID-19 and the U.S stimulus package remained in focus ahead current unemployment benefits expiring today.

The markets were also able to react to particularly dire GDP numbers from Germany and the U.S and Trump’s tweet.

Looking at the latest coronavirus numbers

According to figures at the time of writing, the number of new coronavirus cases rose by 58,655 to 4,626,692 on Thursday. On Wednesday, the number of new cases had risen by 287,638. The daily increase was lower than Wednesday’s rise and down from 270,301 new cases from the previous Thursday.

Germany, Italy, and Spain reported 3,961 new cases on Thursday, which was up from 3,179 new cases on Wednesday. On the previous Thursday, 3,593 new cases had been reported.

From the U.S, the total number of cases rose by 58,655 to 4,626,692 on Thursday. On Wednesday, the total number of cases had increased by 69,828. On Thursday, 23rd July, a total of 69,116 new cases had been reported.

For the Japanese Yen

Industrial production rose by 2.70% in June, following an 8.9% slump in May. Economists had forecast a 1.2% rise.

According to the Ministry of Economy, Trade and Industry,

Industries that mainly contributed to the increase were:

  • Motor vehicles, production machinery, and plastic products.

Industries that mainly contributed to the decrease were:

  • Inorganic and organic chemicals, pulp, paper, and paper products, and other manufacturing.

Industrial production forecasts for July were also positive. Following a 9.2% jump in production forecasted back in June, production is now forecasted to surge by 11.3% in July. In August, production is forecast to rise by 3.4%.

The Japanese Yen moved from ¥104.698 to ¥104.597 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.37% to ¥104.34 against the U.S Dollar.

Out of China

In July, the NBS Manufacturing PMI rose from 50.90 to 51.1, while the Non-Manufacturing PMI slipped from 54.4 to 54.2.

Economists had forecast PMIs of 50.7 and 54.1 respectively.

The Aussie Dollar moved from $0.72039 to $0.72052 upon release of the figures.

For the Aussie Dollar

Producer Price Index and private sector credit figures were in focus early in the day.

According to the ABS,

  • Final demand excluding exports fell by 1.2% in the 2nd quarter and by 0.4% over the past 12-months.
  • Petroleum refining and petroleum fuel manufacturing (-30.1%), child care services (-36.7%), and other agri (-6.4%) weighed.
  • There were increases in other transport equipment (+3.6%), computer and electronic equipment (+3.1%), and other motor vehicle and motor vehicle part manufacturing (+1.2%).

According to the RBA,

Total credit fell by 0.2% in June, following a 0.1% decline in May.

  • Housing credit increased by 0.2%, following a 0.2% rise in May.
  • Personal credit fell by 0.6%, following a 1.3% slide in May, with business credit falling by 0.8%. In May, business credit had fallen by 0.6%.

The Aussie Dollar moved from $0.72032 to $0.72169 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.29% to $0.72145.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.01% to $0.6698.

The Day Ahead:

For the EUR

It’s another busy day ahead on the economic calendar. Key stats include 2nd quarter GDP numbers from France, Spain, and the Eurozone that are scheduled for release. June’s consumer spending and retail sales figures for France and Germany will also draw attention.

Prelim June inflation figures for France, Italy, and the Eurozone, also due out but will likely have a muted impact.

Away from the economic calendar, the Dollar could crumble further should lawmakers fail to pass the stimulus package. An alternative would be an agreement to extend the current enhanced federal unemployment insurance policy.

At the time of writing, the EUR was up by 0.30% to $1.1882.

For the Pound

It’s yet another particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats will continue to leave the Pound in the hands of Brexit and the Dollar. The recent lack of economic data from the UK has allowed Dollar weakness to support a move back through to $1.31 levels.

At the time of writing, the Pound was up by 0.26% to $1.3130.

Across the Pond

It’s a busy day ahead for the U.S Dollar. June’s personal spending and inflation figures are key stats due out later today. Finalized consumer sentiment figures for July are also due out. Barring any material downward revision, however, it will likely be brushed aside.

Away from the calendar, the focus on the day will be on Capitol Hill. A failure by lawmakers to pass the stimulus package or to extend the current unemployment benefit would weigh.

We can also expect plenty of Trump tweets as COVID-19 numbers continue to rise across the U.S.

At the time of writing, the Dollar Spot Index was down by 0.31% to 92.731.

For the Loonie

It’s a relatively busy day ahead on the economic calendar. Key stats include May GDP and June RMPI figures.

Expect the GDP numbers to be the key driver on the day.

Away from the economic calendar, however, any further risk aversion would likely mask any upbeat numbers…

At the time of writing, the Loonie was up by 0.04% to C$1.3418 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Continues to Look Supported

The Euro initially fell during trading on Thursday but continues to find buyers underneath in a sign that perhaps we will find more consolidation up at these nosebleed levels rather than some type of major pullback. The last time we shot straight up in the air we did up forming a bullish flag. This very well could be what we see again because the trade is so heavily balanced towards one direction.

The 1.18 level has caused a significant amount of trouble but given enough time it is very likely that the market will eventually break above there. After all, the trend has changed, and I think that continues to be a major driver of where we go. Longer-term, I think we will eventually go looking towards the 1.20 level, perhaps even higher than that. A pullback from here should find plenty of buyers at the 1.17 handle, and then the 1.16 handle.

EUR/USD Video 31.07.20

I believe that there is essentially a “floor” in the market near the 1.15 level, and I would be very surprised to see this market break down below that crucial level. If it does, that could shake a lot of this up. However, that looks very unlikely to happen, so I am not overly concerned about that possibility right now. In fact, I think that the longer-term trend has changed and I think the majority of traders will be looking to buy dips going forward and push the Euro to much higher levels, perhaps even as high as the 1.25 level over the course of the next year or so.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Mid-Session Technical Analysis for July 30, 2020

The Euro is trading slightly lower at the mid-session after clawing back nearly all of its earlier losses. Additionally, the single-currency remains within striking distance of a two-year high at 1.1816.

The Euro was pressured from the opening on profit-taking after the U.S. Federal Reserve’s comments on Wednesday strengthened the U.S. Dollar. The currency found intraday support after a report showed Euro Zone sentiment rebounded, but gains were capped as unemployment rose.

At 13:18 GMT, the EUR/USD is trading 1.1783, down 0.0009 or -0.07%.

Euro Zone economic sentiment rebounded more than expected in July as governments relaxed restrictions related to the COVID-19 pandemic, with the sharpest gains in industry and services even though consumers became more gloomy, data showed on Thursday.

The European Commission said economic sentiment rose to 82.3 points in July from an upwardly revised 75.8 in June, beating market expectations of an increase to 81.0.

Inflation expectations among consumers for the next 12 months fell to 17.5 in July from 21.6 in June.

Euro Zone unemployment rose to 7.8% of the workforce in June, up from an upwardly revised 7.7% in May.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1806 will signal a resumption of the uptrend. This could trigger a quick rally into the September 24, 2018 main top at 1.1816. This level is a potential trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday basically comes down to momentum.

If the upside momentum we’ve see the last two weeks returns then the two tops at 1.1806 and 1.1816 should easily be overcome.

The first sign of weakness today will be the Euro’s inability to overcome 1.1806. The second sign of weakness will be a lower trade. Finally, taking out yesterday’s low at 1.1741 will turn 1.1806 into a new minor top. This would indicate the selling pressure is getting stronger.

Taking out 1.1806 then closing lower for the session will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Euro Pares Some Gains Following Fed Decision

The markets initially continued in line with their trends after yesterday’s Fed meeting but have since reversed course. Equities and precious metals have erased some of their recent gains while the dollar is seen bouncing against all of its major counterparts in early trading on Thursday.

Federal Reserve Chair Jerome Powell cautioned that the economic recovery hinges on the ability to contain the Coronavirus.

He expressed optimism regarding the recovery in the labor markets but also indicated that economic indicators are suggesting the economic recovery may have stalled.

Nevertheless, policymakers remain data-dependent and will continue to assess incoming economic reports and progress in containing the virus.

Powell commended the government after an announcement earlier in the week of a new potential fiscal stimulus package that is said to be worth around $1 trillion. The Fed Chair reiterated that ongoing fiscal and monetary support is needed to aid the economy in its recovery after an economic downturn he called “the most severe in our lifetime.”

Later in the North American session, the US will release GDP figures for the second quarter. Analysts expect the economy to have contracted a staggering 34.5%.

The unemployment rate in the euro area was reported to rise to a 15-month high of 7.8% in June. Ahead of the report, the jobless rate had held steady between 7.3%-7.4% for five straight readings.

Technical Analysis

EURUSD 4-Hour Chart

The 1.1800 handle has proven to be a major hurdle as EUR/USD has made two failed attempts at the level this week.

There is some potential for a retracement at this stage, especially considering that the exchange rate is quite oversold.

The antipodean currencies are the heaviest in early trading on Thursday, and technical developments in AUD/USD and NZD/USD may offer a leading signal for the dollar’s next move.

Near-term support for the pair is seen at 1.1700 while it will take a break above 1.1800 for the pair to regain upward momentum.

Bottom Line

  • The markets have reversed course in early trading today. The dollar is recovering and the Antipodean currencies are hit the hardest.
  • GDP data will be released later in the day. As it is the first reading, a volatile reaction may be seen in the markets.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Retracement is Needed

The EUR/USD has formed an overbought condition and we might see a relief before the next rally.

1.1800 zone showed some sellers as the price is retracing lower. At this point we might see buyers around 1.1737 but more likely around 1.1705. If buyers take over again then 1.1817 is next and 1.1843. However, a retracement is needed and IMO, price might retrace to the POC zone before the next bounce. Only below 1.1700 we might go for a deeper retracement – 1.1572.

The Analysis has been done with the CAMMACD.Core and Sit Systems

For a look at all of today’s economic events, check out our economic calendar.

 

 

Economic Data Puts the Greenback and the EUR in Focus

Earlier in the Day:

It’s was a busier start to the day on the economic calendar. The Kiwi Dollar and the Japanese Yen were in action in the early part of the day.

Away from the economic calendar, COVID-19 and the U.S stimulus package remained in focus following the FED’s overnight monetary policy decision.

Looking at the latest coronavirus numbers

According to figures at the time of writing, the number of new coronavirus cases rose by 287,638 to 17,171,292 on Wednesday. On Tuesday, the number of new cases had risen by 241,391. The daily increase was higher than Tuesday’s rise while down from 288,688 new cases from the previous Wednesday.

Germany, Italy, and Spain reported 3,179 new cases on Wednesday, which was up from 2,602 new cases on Tuesday. On the previous Wednesday, 2,217 new cases had been reported.

From the U.S, the total number of cases rose by 69,828 to 4,498,209 on Wednesday. On Tuesday, the total number of cases had increased by 64,799. On Wednesday, 22nd July, a total of 72,306 new cases had been reported.

For the Kiwi Dollar

Building consents and July business confidence figures provided the Kiwi Dollar with direction early on.

According to NZ Stats, building consents rose by 0.50% in June, following a 41.7% jump in May. While up marginally for the month, consents were up by close to 20% from June 2019.

The Kiwi Dollar moved from $0.66681 to $0.66657 upon release of the data.

In July, the ANZ Business Confidence Index rose from -34.4 to -31.8.

According to the latest ANZ Report,

  • A net 9% of firms expect weaker economic activity in their own business, rising from -26% in June.
  • The retail sector drove the recovery, while the agriculture sector was the most negative.
  • 31% of firms say they intend to lay off staff, and 24% say they have less staff than a year ago.

The Kiwi Dollar moved from $0.66649 to $0.66570 upon release of the figures. At the time of writing, the Kiwi Dollar down by 0.18% to $0.6657.

For the Japanese Yen

According to the Ministry of Economy, Trade, and Industry, retail sales fell by 1.20%. Economists had forecast a 6.50% slide. In May retail sales had tumbled by 12.3% in May, year-on-year.

The Japanese Yen moved from ¥105.012 to ¥105.008 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.14% to ¥105.07 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was up by 0.18% to $0.7175.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats include 2nd quarter GDP and July unemployment figures from Germany.

The Eurozone’s unemployment rate and German prelim July inflation figures for July are also due out. The numbers will likely have a muted impact on the EUR.

Expect the GDP and July unemployment figures to be the key driver, along with COVID-19 news and U.S stimulus package updates.

At the time of writing, the EUR was down 0.17% to $1.1772.

For the Pound

It’s yet another particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats will continue to leave the Pound in the hands of Brexit and market risk sentiment.

At the time of writing, the Pound was down by 0.13% to $1.2980.

Across the Pond

It’s another relatively busy day ahead for the U.S Dollar. 2nd quarter GDP and weekly initial jobless claims figures are due out.

While we can expect influence from the GDP numbers, the weekly jobless claims could garner more attention. Another rise in claims will test the market’s resolve.

Away from the calendar, the U.S stimulus package and COVID-19 will remain in focus.

At the time of writing, the Dollar Spot Index was down by 0.10% to 93.357.

For the Loonie

It’s another particularly quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

A lack of stats will leave the Loonie in the hands of market risk sentiment that will be driven by geopolitics and COVID-19.

At the time of writing, the Loonie was down by 0.05% to C$1.3346 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

Daily Forex Briefing 29/07/2020

In today’s Daily Briefing, we found those amazing setups we thought you’d find interesting!

EUR/PLN bouncing from a crucial support on the 4,4.

Brent with a possible false bearish breakout and an upswing but still below important resistance.

EUR/USD awaits the FOMC inside of a pennant.

USD/JPY is getting ready to test the 106 as a resistance.

EUR/CHF bouncing from the upper line of the flag.

GBP/NZD with a major, long-term buy signal.

EUR/JPY finishing a big inverse head and shoulders pattern.

EUR/NZD with a double bottom formation but still below important resistance.

SP500 drawing a head and shoulders pattern but buyers have an appetite for an upswing.

CAC in a slightly worse position but still fighting on a major up trendline.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Churn

The Euro has initially tried to rally during the trading session on Wednesday, but as we await the FOMC statement and press conference, it is very likely that the markets are just killing time until we get that out of the way. Regardless, this is a market that is a little extended so at the very least I think we are going to go sideways. With the Federal Reserve looking to keep monetary policy loose for the foreseeable future, it does make sense that this pair would go higher. Having said that, we cannot go straight up in the air forever, so I think a pullback, albeit slight, is probably in the cards.

EUR/USD Video 30.07.20

This is not to say that you can sell the market, quite the opposite. It means that you should be looking to buy the Euro at lower levels. Once we broke significantly above the 1.15 handle, it marked a major turning point in the direction of this market. I think at this point we are more than likely to see a lot of noise more than anything else, as this marketplace continues to struggle to push higher.

Once we do break above the 1.18 level though, I fully anticipate that this market will go looking towards the 1.20 level, and perhaps even beyond. The Euro is historically cheap and has been beaten down for several years, perhaps it is time for the trend to change longer-term? With the Federal Reserve out there pushing against the US dollar, that is more likely than not. However, we live in very volatile times so you cannot just jump in with both feet.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Mid-Session Technical Analysis for July 29, 2020

The Euro is trading higher against the U.S. Dollar at the mid-session on Wednesday, but hovering below two-year highs as traders await the release of the U.S. Federal Reserve’s interest rate and monetary policy decisions.

The Fed is expected to leave interest rates unchanged and reiterate that it’s not likely to raise rates for at least two years. The Fed is also expected to reiterate its dovish tone and may even announce new stimulus measures to combat the economic damage being caused by rising COVID-19 cases.

Additionally, Fed Chairman Jerome Powell will hold a press conference. He’s expected to say the economic recovery will slow if the coronavirus isn’t contained.  A stern rebuke from Powell could trigger a surge in the Euro.

At 13:23 GMT, the EUR/USD is trading 1.1756, up 0.0039 or +0.34%.

In other news, Euro Zone government bond yields edged up before a U.S. Federal Reserve meeting later on Wednesday, but remained within touching distance of two-month lows as a variety of negative headlines hurt market sentiment.

Additionally, analysts at DZ Bank said, “Meanwhile, the consensus over a second coronavirus relief package which could be used to alleviate a second wave of the pandemic is tottering, thus spawning growing concerns about the outlook for the U.S. economy.”

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1781 will signal a resumption of the uptrend. The EUR/USD is in no position to change the main trend to down, but there is plenty of room to the downside with several retracement levels reasonable downside targets.

Daily Swing Chart Technical Forecast

A trade through 1.1781 could trigger a breakout to the upside with the September 24, 2018 top at 1.1816 the next likely upside target. This is also a trigger point for an acceleration to the upside.

Meanwhile, there is no trigger point for an acceleration to the downside, but taking out Monday’s low at 1.1624 will break the bullish pattern. This could lead to an eventual test of the short-term 50% level at 1.1576.

For a look at all of today’s economic events, check out our economic calendar.