EUR/USD Analysis: Weekly range contraction warns of trend reversal
EUR/USD News (Euro US Dollar)
EUR/USD: Bid in holiday-thinned trade, bullish channel breakdown confirmed
EUR/USD is mildly bid in Asia, but the gains could be short-lived, as yesterday’s sell-off seems to have put sellers in commanding position for the near term.
EUR/USD latest news
EUR/USD latest analysis
1. Technical Overview
The shared currency fell more than 70 pips yesterday, confirming a downside break of the rising channel. The repeated failure to close above 1.13 followed by the bullish channel breakdown indicates the path of least resistance is now to the downside and the recent lows near 1.1170 could soon come into play.
The sell-off, however, may not happen today, as trading volumes will remain thin on account of the Good Friday holiday in major FX trading hubs in Europe and the US.
EUR/USD PRICE SENTIMENT
EUR/USD BULLISH PERCENTAGE INDEX
EUR/USD Pivot points
EUR/USD trading positions
2. Fundamental Overview
The EUR/USD pair fell to 1.1225, its lowest for this week, as the latest Markit PMI confirmed that the sluggish growth in the Union has extended into the beginning of the second quarter, backing the case of ECB's stimulus. German manufacturing activity bounced modestly in March according to preliminary estimates, although the PMI remained in contraction territory at 44.5. The Services sector did a bit better, with the PMI surging to a 7-month high of 55.6, resulting in the Composite index improving to 52.1. Other countries such as France and Italy, did better-than-expected with the indexes bouncing, yet for the whole Union, German's soft figures weighed, with the Manufacturing index resulting in at 47.8 and the services one at 52.5, both missing the market's expectations.
US data released ahead of Wall Street's open gave the pair another push lower, as Retail Sales were up by 1.6% MoM in March vs. the 0.9% forecasted. The Retail Sales Control Group increased by 1.0% against the market's expectations of a 0.4% advance. The US also released unemployment claims, which decreased to 193 K vs. the expected 205K in the week ended April 5, a new almost five-decade low. The April Philadelphia Fed Manufacturing Survey showed that business activity kept growing, although at a slower pace than anticipated, with the index printing 8.5 vs. 10.4 forecasted. However, the Markit April reports missed expectations, putting a temporal halt to the dollar's strength. The Manufacturing Index printed 52.4, matching the March figure, while the Services index declined to 52.9 from the previous 55.3.
EURUSD FUNDAMENTALS TODAY
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The Tale of the Prosperous Consumer-US Retail Sales
American consumers asserted the right to spend in a grand fashion in March boosting retail sales to the fastest expansion in 18 months as the booming job market put the shutdown marked holiday season to rest.
3. Big Picture
Themes affecting the EUR/USD
SPECIAL YEARLY FORECAST
EUR/USD Forecast 2019: At the starting line of a long and bumpy road
Two things dominated the financial world this 2018: political turmoil and fears of slowing economic growth. The first was quite foreseeable with Brexit and Trump´s victory in the US but the second dawned on markets like a cold shower in the second half of the year. It was not far ago when EU's growth hit record highs, according to Markit, with business activity shrinking to its lowest pace of growth in over four years in December.
EUR/USD Forecast 2019: At the starting line of a long and bumpy road
GBP/USD Forecast 2019: Imprisoned by Brexit darkness Sterling is set to chart a check mark
USD/JPY Forecast 2019: A barometer of global growth and markets
AUD/USD Forecast 2019: Collateral damage from the US-China trade war
USD/CAD Forecast 2019: CAD comeback on the cards
Influential Institutions & People for the EUR/USD
The Euro US Dollar can be seriously affected by news or the decisions taken by two main central banks:
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone and maintain price stability, so that the euro’s purchasing power is not eroded by inflation. The ECB aims to ensure that the year-on-year increase in consumer prices is less than, but close to 2% over the medium term. Another of its tasks is the one of controlling the money supply. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Mario Draghi, member of the Executive Board, is also the President of this organism.
ECB Official Website, on Twitter and YouTube
On the other
FED Official Website, on Twitter and Facebook
Mario Draghi
Mario Draghi is member of ECB's Executive Board and also the President of this organism. His declarations are an important source of volatility, especially for the Euro and the currencies traded against it. Born in 1947 in Rome, Italy, he graduated of the Massachusetts Institute of Technology and became President of the European Central Bank in 2011. Draghi gives press conferences in the back of how the ECB observes the current European economy. His comments may determine positive or negative trends for the Euro in the short-term. Usually, a hawkish outlook is seen as positive/bullish for the EUR, while a dovish one is seen as negative/bearish.
Draghi on ECB'S Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
ECB NEWS & ANALYSIS
FED NEWS & ANALYSIS
About EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, it is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online. If there is important U.S. data we can expect quiet markets just ahead of the number. U.S. economic news have the ability to either reinforce an existing trend or reverse it depending on by how much it missed or beat expectations with the EUR/USD news. By 5:00 GMT liquidity leaves the market once again as European traders close out positions and head home.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', reffering to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from United States of America). The Cable is a widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, where the majority of the British voted to abandon the European Union, GBP/USD has been suffering some turbulence in the Forex market as a consequence of the associated risks of leaving the single market.
USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair is one of the 'Majors', the most important pairs in the world. Japanese Yen has a low interest rate, normally used in carry trades, that's why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when reffered to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is dued to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.