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Euro-US Dollar Exchange rate: Current 1.3219 (Sunday, January 29, 2011)
EURUSD Trend: Upward correction during downtrend.
Euro-Dollar Outlook: More upward correction before another fall.
Please refer daily currency charts and not short-term charts e.g. hourly charts.
EURUSD (Euro-US Dollar) -Recent Economic Releases:
• EU: Consumer Confidence (Prelim): -20.6, less than the forecast of -20.0 but better than the previous -21.3.
• EU: German PMI (Manufacturing) -Prelim: 50.9, positive as compared to the forecast (49.2) as well as the previous release (48.4).
• EU: German PMI (Services) -prelim: 54.5, positive as compared to the forecast (52.6) as well as the previous release (52.4).
• EU: PMI (Manufacturing) -prelim: 48.7, positive as compared to the forecast (47.5) as well as the previous release (46.9).
• EU: PMI (Services) -prelim: 50.5, positive as compared to the forecast (49.1) as well as the previous release (48.8).
• EU: Industrial New Orders (YoY): -2.7%, same as the forecast but quite poor against the previous 1.5%. The month on month data (1.3%) was better than the forecast of -2.1% but again quite less than the previous 1.5%.
• EU: German IFO Expectations: 100.9, positive as compared to the forecasts (99.0) as well as the previous (98.6).
• EU: German IFO Business Climate: 108.3, positive as compared to the forecasts (107.8) as well as the previous (107.3).
• EU: German IFO- Current Assessment: 116.3, slightly negative as compared to the forecast (116.8) as well as the previous (116.7).
• EU: German Gfk Consumer Confidence Survey: 5.9, positive as compared to the forecasts (5.6) as well as the previous (5.7).
• US: Durable Goods Orders: 3.0%, positive as compared to the forecasts of 2.0% but less than the previous 4.3%.
• US: Jobless Claims: Initial claims 377K were negative as compared to the forecast (374K) as well as the previous 356K. Continuing claims 3.554M were also poor against the forecasts of 3.50M and previous 3.466M.
• US: Leading Indicators (MoM): 0.4%, negative as compared to the forecast of 0.7% but quite better than the previous 0.2%.
• US: New Home Sales (MoM): 0.307M, negative as compared to the forecasts (0.320M) as well as the previous release (0.314M).
• US: GDP Annualized -prelim: 2.8%, less than the forecasts of 3.0% but quite better than the previous 1.8%.
• US: GDP Price Index -prelim: 0.4%, quite negative as compared to the forecast (2.0%) as well as the previous release (2.6%).
• US: Real Personal Consumption Expenditures (QoQ): 1.1%, negative as compared to the forecasts (2.3%) as well as the previous release (2.1%).
• US: Reuters/Michigan Consumer Sentiment Index: 75.0, positive as compared to the forecast (73.9) as well as the previous release (69.9).
EURUSD (Euro-Dollar)- Technical Trend Analysis:
1) ADX:EURUSD daily +DI line remains over -DI line with a widening gap. ADX is below 25 but is rising (approx 23.80).
2) MACD:EURUSD daily MACD line remains over the signal line with a wide and convincing gap. 4-hourly MACD has been having frequent crossovers with the signal line but the downward crossovers have been less convincing and short-lived. The subsequent peaks and bottoms both have been getting higher since the beginning of the last week.
3) Ichimoku Cloud:Tenkan-Sen crossed over Kijun-sen to give a weak bullish signal (you may please check our Ichimoku cloud page under technical analysis). The upward move broke over the resistance of first the lower edge of the cloud and the upper edge also. The weekly closing was slightly above the upper edge. Please check EURUSD daily Ichimoku cloud.
Euro-Dollar (EURUSD) : Forecast /Outlook:
Previous Outlook of EURUSD:
“In case EURUSD breaks over 1.2986 and then above 1.3030 to 1.3083 resistance zone then we would expect some more upward correction towards 1.3230/1.3250. This zone would represent the resistance zone of Fibonacci 38.2% retracement of the downward move from October 27th to the recent bottom of January 15th.”
This week:
Well, the Euro-Dollar pair broke the resistance mentioned last weekend and quoted above and then moved further up as we had mentioned towards 1.3230. The currency pair went as high as 1.3233 or a few pips below the Fibonacci 38.2% retracement of the downward move from October 27th to the recent bottom of January 15th. Please check this eurusd daily chart.
The strong upward correction and the break above the upper edge of the daily Ichimoku cloud indicate that we can expect some more upward correction in the coming days. The development in Europe about the debt crisis do not really add any strong positive outlook for Euro in the mid-term.
On the upside a break over the Fibonacci 38.2% retracement, as mentioned above, i.e. 1.3244 and then 1.3260 is important. A firm break above this zone should take EURUSD towards the resistance zone of 1.3430 to 1.3485 resistance zone. Please note that 1.3434 represents the Fibonacci 50% retracement of the above mentioned move. Not only this but the range of 1.3430 to 1.3550 had proved to be a very strong resistance zone during November 30th to December 9th, 2011. The psychological resistance of 1.3500 would also come into picture at those levels. However a break above this will bring up the possibilities of a test to 1.3620.
Please note that we are considering the recent move as only a correction/consolidation during the overall downtrend and overall we would expect a fall from one of these resistance levels. On the downside the important support levels would be 1.3040 and then 1.2960. A firm break of these support levels and then 1.2930 should take the euro-dollar pair to retest the recent 1.2626/1.2624 bottom. The support levels mentioned are based on 55-day and 22-day EMA as well as the supports of Tenkan and Kijun-Sen of the daily Ichimoku cloud.
Strategies for trading EUR/USD (Euro-US Dollar):
As mentioned above, the outlook for EURUSD is bearish but initially some more upward correction is expected. Our initial positions will be on buy side considering the resistance and supports mentioned but then we would look forward to going short near the final resistance levels mentioned.
(Please join the News Letter to get email alerts when the Forex analysis/forecast is updated. Please also check and share any real time Euro-Dollar Trade in Forum) and current EURUSD market sentiments.
For short term Forex trading analysis, please refer to daily technical analysis for Euro US Dollar at EUR/USD daily analysis daily analysis section.
Euro/Dollar Interest Rate Comparision
(For Carry Trade) |
1.00% |
0.25% |
0.75% |
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