EURUSD: digesting NFP
The pivotal moment during the previous week was the moment of a release of jobs data in the US. Friday brought increased volatility, considering weaker than expected non-farm payrolls. NFP reached the level of 142K in August, which was an increase from the revised figure from the previous month of only 89K. Still, the market was expecting to see the figure of 160K for the same month. At the same time, the unemployment rate dropped a bit to the level of 4,2% in August, from 4,3% posted for July. On a positive side is that hourly earnings were increased by 0,3% for the month, bringing the total increase to 3,8% on a yearly basis. This increase was by 0,1% higher from market estimate. As for other economic data posted during the week, the ISM Manufacturing PMI for August was in line with market expectations, reaching the level of 47,2. ISM Services PMI for August reached 51,5 which was again in line with market estimate. Figures show that the US continues to struggle with the manufacturing industry, while the services sector remains positive.
The Producers Price Index in the Euro Zone was increased by 0,8% in July for the month, bringing the index to the level of -2,1% compared to the year before. Retail Sales picked up in the Euro Zone in July by 0,1% for the month, but still remained negative by -0,1% when measured for the year. Balance of trade in Germany further dropped in July to the level of Eur 16,8B, below market forecast of Eur 21,9B.
As expected, the currency pair was traded in a mixed manner during the previous week. The fundamental and macro data currently have a huge impact on investors sentiment. The eurusd was traded within a higher spread during the week, between levels of 1,1155 and 1,1065. However, the majority of trades were conducted at levels below the 1,11 level, and closed the week at 1,1085. The RSI was more oriented toward the oversold market side, reaching the level of 43 as of the weekend. The clear oversold side has not been reached, leaving some space for the currency pair to reach lower grounds, before the short reversal to the upside. Moving averages of 50 and 200 days are continuing with divergence from each other after the formation of a cross two weeks ago.
The week ahead should be a calmer one when compared to the week before. The markets will use it to digest the latest NFP data. Still, the inflation rate for August in the US is expected to be released, however, some significant surprises are not expected at this moment. Also, it should be considered that the ECB will decide on a reference interest rate, where markets are expecting a further 25 bps cut. As per current charts, a modest move toward the 1,10 support line is probable during the week ahead, however, a higher probability is on the upside, where the currency pair might test the level of 1,11 for one more time.
Important news to watch during the week ahead are:
EUR: Inflation rate final for August in Germany, ECB Interest rate decision, ECB Press Conference, Industrial Production in the Euro Zone in August,
USD: Inflation rate in August, Producers Price Index in August, Michigan Consumer Sentiment preliminary for September
The Producers Price Index in the Euro Zone was increased by 0,8% in July for the month, bringing the index to the level of -2,1% compared to the year before. Retail Sales picked up in the Euro Zone in July by 0,1% for the month, but still remained negative by -0,1% when measured for the year. Balance of trade in Germany further dropped in July to the level of Eur 16,8B, below market forecast of Eur 21,9B.
As expected, the currency pair was traded in a mixed manner during the previous week. The fundamental and macro data currently have a huge impact on investors sentiment. The eurusd was traded within a higher spread during the week, between levels of 1,1155 and 1,1065. However, the majority of trades were conducted at levels below the 1,11 level, and closed the week at 1,1085. The RSI was more oriented toward the oversold market side, reaching the level of 43 as of the weekend. The clear oversold side has not been reached, leaving some space for the currency pair to reach lower grounds, before the short reversal to the upside. Moving averages of 50 and 200 days are continuing with divergence from each other after the formation of a cross two weeks ago.
The week ahead should be a calmer one when compared to the week before. The markets will use it to digest the latest NFP data. Still, the inflation rate for August in the US is expected to be released, however, some significant surprises are not expected at this moment. Also, it should be considered that the ECB will decide on a reference interest rate, where markets are expecting a further 25 bps cut. As per current charts, a modest move toward the 1,10 support line is probable during the week ahead, however, a higher probability is on the upside, where the currency pair might test the level of 1,11 for one more time.
Important news to watch during the week ahead are:
EUR: Inflation rate final for August in Germany, ECB Interest rate decision, ECB Press Conference, Industrial Production in the Euro Zone in August,
USD: Inflation rate in August, Producers Price Index in August, Michigan Consumer Sentiment preliminary for September
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