EURUSD: short reversal ahead?
The Existing Home Sales in the US dropped further in September by -0,1%, but it was still a lower drop from market forecast of -1,6%. At the same time, Building permits for September were standing at -3,1% for the month, while new home sales increased by 4,1% in September. Durable Goods Orders were lower by -0,8% in September for the month, a bit higher from market forecast of -0,5%. Michigan Consumer Sentiment final for October was standing at the level of 70.5, modestly above market expectation of 68,9. At the same time, 5 years inflation expectations dropped to the level of 3,0%, from 3,1% posted previously.
The PPI index dropped by -0,5% in Germany in September, leading to a yearly drop of -1,4%. Figures were higher from market forecast of -0,8%. The HCOB Manufacturing PMI in Germany, flash for October reached the level of 42,6, and was a bit higher from market consensus of 40,6. The services sector continues to hold within a positive territory, with HCOB Services PMI flash reaching 51,5 for October. At the same time, the HCOB Composite PMI flash for October in the Euro Zone was standing at 49,7, although the market was expecting to see the level of 50,1. The Ifo Business Climate in Germany in October reached the level of 86,5 a bit higher from market consensus of 85,5.
The Euro Zone economy continues to struggle with growth, after the ECB managed to put inflation under control. Comments made by President Lagarde indicate that the ECB is in a sort of hurry to put interest rates at the neutral zone. This means further rate cuts till the end of this year. Markets reacted to such a sentiment, by pushing Euro to the lower grounds. During the previous week the eurusd pair was testing the 1,08 support line, with lowest weekly level reached at 1,076. The currency pair rebound after, toward the highest weekly level at 1,083, however it is ending the week around the 1,08 level. The RSI reached the clear oversold market side, which indicates higher potential for a short term reversal. The moving average of 50 days started clear convergence toward the MA200, indicating a potential for a cross in the coming period.
The week ahead brings data for Non-farm payrolls and PCE Index which might bring a higher volatility to the market. The support line at 1,08 has been tested during the previous week, and it will be also a starting point for the week ahead. Considering that RSI is currently moving in the oversold territory, increasing the potential for a short reversal. In this sense, the level of 1,09 might be an easy target for the week ahead. Higher grounds are currently not indicated on charts. On the opposite side, charts are modestly revealing the 1,07 level, however, this might be a target for the longer-term period, and not for the week ahead.
Important news to watch during the week ahead are:
EUR: GfK consumer Confidence in Germany in November, Unemployment rate in Germany and the Eurozone in October, Q3 flash GDP Growth Rate in Germany and the Euro Zone, Inflation Rate in Germany and the Euro Zone preliminary for October,
USD: JOLTs Job Openings, CB Consumer Confidence, Q3 GDP Growth Rate, PCE Index for September, Personal Income and Spending for September, Initial Jobless Claims, Non-Farm Payrolls in October, Unemployment Rate in October, ISM Manufacturing PMI for October.
The PPI index dropped by -0,5% in Germany in September, leading to a yearly drop of -1,4%. Figures were higher from market forecast of -0,8%. The HCOB Manufacturing PMI in Germany, flash for October reached the level of 42,6, and was a bit higher from market consensus of 40,6. The services sector continues to hold within a positive territory, with HCOB Services PMI flash reaching 51,5 for October. At the same time, the HCOB Composite PMI flash for October in the Euro Zone was standing at 49,7, although the market was expecting to see the level of 50,1. The Ifo Business Climate in Germany in October reached the level of 86,5 a bit higher from market consensus of 85,5.
The Euro Zone economy continues to struggle with growth, after the ECB managed to put inflation under control. Comments made by President Lagarde indicate that the ECB is in a sort of hurry to put interest rates at the neutral zone. This means further rate cuts till the end of this year. Markets reacted to such a sentiment, by pushing Euro to the lower grounds. During the previous week the eurusd pair was testing the 1,08 support line, with lowest weekly level reached at 1,076. The currency pair rebound after, toward the highest weekly level at 1,083, however it is ending the week around the 1,08 level. The RSI reached the clear oversold market side, which indicates higher potential for a short term reversal. The moving average of 50 days started clear convergence toward the MA200, indicating a potential for a cross in the coming period.
The week ahead brings data for Non-farm payrolls and PCE Index which might bring a higher volatility to the market. The support line at 1,08 has been tested during the previous week, and it will be also a starting point for the week ahead. Considering that RSI is currently moving in the oversold territory, increasing the potential for a short reversal. In this sense, the level of 1,09 might be an easy target for the week ahead. Higher grounds are currently not indicated on charts. On the opposite side, charts are modestly revealing the 1,07 level, however, this might be a target for the longer-term period, and not for the week ahead.
Important news to watch during the week ahead are:
EUR: GfK consumer Confidence in Germany in November, Unemployment rate in Germany and the Eurozone in October, Q3 flash GDP Growth Rate in Germany and the Euro Zone, Inflation Rate in Germany and the Euro Zone preliminary for October,
USD: JOLTs Job Openings, CB Consumer Confidence, Q3 GDP Growth Rate, PCE Index for September, Personal Income and Spending for September, Initial Jobless Claims, Non-Farm Payrolls in October, Unemployment Rate in October, ISM Manufacturing PMI for October.
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