The common currency has accelerated north with the European opening, boosted by robust local data. The German IFO survey showed that German business confidence improved more than expected in July, due to the easing concerns of a Grexit after the country reached an agreement with its European counterparts. Also, the EU money supply rose, to 11.8% in Jun from 11.2% in May. The figure, that includes currency in circulation and overnight deposits, is a clear result of the ongoing QE, and points for higher inflation levels in the region.
Later on in the day, the US will release its Durable Goods Orders for June, expected at 3.0% from previous -2.2%. The release can be a good barometer of the situation of the US economy and therefore anticipate whatever the Federal Reserve will decide this Wednesday, in its economic policy meeting.
View live chart of the EUR/USD
Technically the EUR/USD pair presents a strong bullish short term tone, as the 4 hours chart shows that the price has accelerated strongly above a bullish 20 SMA, whilst the technical indicators head sharply higher in positive territory. The rally, however, stalled at the roof of the daily descendant channel coming from 1.1435, June monthly high, around 1.1100. As long as the price holds above 1.1050, the immediate support, the pair will maintain its upward potential, with large stops waiting above the 1.1120 level. If triggered, the rally can extend up to 1.1160, and above this last, towards the 1.1200 level.
Below the mentioned 1.1050 level on the other hand, the pair will likely retreat towards the 1.1000 price zone, whilst further declines below this last expose the 1.0950/60 region.
Latest updates on the EUR/USD Forecast
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EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
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