EUR/USD Outlook – 2012/10/12

October 12, 2012 in Forex Analysis

EUR/USD had a strong upward jump from the low of 1.2825 to 1.2951 and went into sideways mode after finding resistance much before the psychological 1.3000 and previous resistance of 1.2961.

EUR/USD Today – Hourly Chart

EURUSD Hourly Chart - October 12 2012

The support before this upward move had come above the 55-day EMA support level. Please see the following daily chart:

EUR/USD Daily Chart

EUR/USD Daily Chart - October 12 2012

EUR/USD – Economic Releases

The important economic releases of yesterday were mixed:

Euro Zone:

1) Consumer Price Index: The year-on-year change in German CPI came out same as the consensus of 2.0%. The previous release was 2.1% and hence not much change. Same was with the year on year Harmonized CPI from Germany which was 2.1% and was same as expected while the previous release had shown 2.2% change.

2) ECB’s monthly report released yesterday mentions about reduction of risk for Euro zone’s economic outlook but it is an ongoing process of rescue and obstacles and nothing can be taken at the face value. You may please check ECB’s Monthly Report.

U.S.:

1) The jobless Claims reports were better than expected and the previous release. Initial jobless claims were down to 339K from the previous 369K.  The consensus  was for a rise to 370K. Same was with continuing jobless claims which came out as 3.273M against the previous 2.288M.

2) While the jobless claims reports cane out, the Trade Balance was poor.  The consensus was that the trade balance will drop to USD -44.00B from the previous -42.47 Billion U.S. Dollar but the drop was more than that and the trade balance of August came out as USD -44.22 Billion.

EUR/USD – Today’s Important Economic Releases:

Apart from IMF meeting the following important economic releases are scheduled for today:

Euro zone:

1) Industrial Production reports at GMT 09:00.

U.S.A.:

1) Producer Price Index reports at 12:30 GMT.

2) Reuters/Michigan Consumer Sentiments Survey’s preliminary report at 13:55 GMT.

3) Monthly Budget Statement at 18:00 GMT.

EUR/USD – What to Expect

Overall outlook is for further downward consolidation as mentioned in yesterday’s EUR/USD outlook but possibilities of some more upward moves can not be ignored. On the upside first the resistance near 1.2961 is critical. In case this resistance is broken then next resistance is expected near 1.2991. Both these levels had not only caused resistances earlier but are also important because of approaching 1.3000 psychological levels. In case these resistances are not broken decisively then we would expect another fall. On the downside a support is expected near 1.2913. This zone was earlier a resistance zone but should now turn to a support zone. If this support and then 1.2900 are broken then we can expect a retest of the recent 1.2825 and possibly a deeper move towards 1.2740.

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