A quite volatile week draws to an end, with the EUR/USD having completed a 500-pip round trip to above 1.1700 and now trading in negative ground for the week, on track to post its first loss in three.
This weekend, central bankers are gathered in Jackson Hole Wyoming for the annual Symposium, with Federal Reserve Chair Janet Yellen as the most important absent. Elsewhere, investors’ attention remains on China, oil prices and US data.
While calm in markets seems to have been restored following a sharp slump in Chinese equities, it remains to be seen whether it could be sustainable.
US data has become even more relevant lately given that the Fed has assured the bank will make its decision for or against an interest rate hike strictly based on economic data. Despite improving fundamentals in US, it is not that clear whether the Fed is ready to raise rates as soon as September as inflation remains subdued and well below the central bank's target. This data-dependency maintains investors very expectant of economic releases and incoming indicators could continue to offer volatility.
US gross domestic product revision showed much better data than the initial reading. GDP expanded at a 3.7% annual pace instead of the 2.3% rate reported last month. Next week’s releases include ISM manufacturing PMI on Tuesday, ADP employment report on Wednesday and the key event of the week, the last nonfarm payrolls report before Fed’s September meeting. US economy is expected to add 220,000 new jobs in August and the unemployment rate to stay at 5.3%.
The European Central Bank will hold its monetary policy meeting on Thursday, but no changes are expected at this point and it could easily turn into a non-event.
EUR/USD technical perspective
EUR/USD pulled back from 1.1700, back below the 23.6% Fib retracement of the broader 1.3993-1.0462, with a low scored at the 1.1170 area so far.
Technically speaking, the daily chart shows indicators correcting from overbought levels toward their midlines while weekly chart holds a mild bullish tone. EUR/USD needs to sustain gains above 1.1290, mentioned Fibo level, to confirm an upward extension to 1.1470 en route to the 1.1530 region, February highs. However, it would take a strong unexpected boost to lift the pair above 1.1700 in the short-term.
On the downside, the 1.1150/40 zone is next strong support in line with a break below paving the way towards the 1.1100 area.
This weekend, central bankers are gathered in Jackson Hole Wyoming for the annual Symposium, with Federal Reserve Chair Janet Yellen as the most important absent. Elsewhere, investors’ attention remains on China, oil prices and US data.
While calm in markets seems to have been restored following a sharp slump in Chinese equities, it remains to be seen whether it could be sustainable.
US data has become even more relevant lately given that the Fed has assured the bank will make its decision for or against an interest rate hike strictly based on economic data. Despite improving fundamentals in US, it is not that clear whether the Fed is ready to raise rates as soon as September as inflation remains subdued and well below the central bank's target. This data-dependency maintains investors very expectant of economic releases and incoming indicators could continue to offer volatility.
US gross domestic product revision showed much better data than the initial reading. GDP expanded at a 3.7% annual pace instead of the 2.3% rate reported last month. Next week’s releases include ISM manufacturing PMI on Tuesday, ADP employment report on Wednesday and the key event of the week, the last nonfarm payrolls report before Fed’s September meeting. US economy is expected to add 220,000 new jobs in August and the unemployment rate to stay at 5.3%.
The European Central Bank will hold its monetary policy meeting on Thursday, but no changes are expected at this point and it could easily turn into a non-event.
EUR/USD technical perspective
EUR/USD pulled back from 1.1700, back below the 23.6% Fib retracement of the broader 1.3993-1.0462, with a low scored at the 1.1170 area so far.
Technically speaking, the daily chart shows indicators correcting from overbought levels toward their midlines while weekly chart holds a mild bullish tone. EUR/USD needs to sustain gains above 1.1290, mentioned Fibo level, to confirm an upward extension to 1.1470 en route to the 1.1530 region, February highs. However, it would take a strong unexpected boost to lift the pair above 1.1700 in the short-term.
On the downside, the 1.1150/40 zone is next strong support in line with a break below paving the way towards the 1.1100 area.
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