Forex Marketz Daily Forex News – Fully Markets Update
EUR/USD (1.1237)
The euro and the US Dollar should be in play this week. We have a lot of event risk on the horizon as a number of key data, like the US non-farm payroll (NFP) report will hit investors on Friday and the European Central Bank is scheduled to meet as well towards the middle of the week.
Let’s look at three key points before the economic calendar
- Technically speaking, looking at the above daily EUR/USD MT 4 chart, there are a series of lower highs. This could lead to further losses, especially if former resistance, now support at 1.1209 fails to hold. There is another support level just above that at 1.1179/80. You should also note that the RSI indicator has not retained the bullish momentum seen since July.
- There has been a lot of dovish rhetoric coming out of the European Central Bank (ECB) as of late. Policy makers are showing an increasing willingness for another round of easing. We could get more quantitative easing (QE) or other easy monetary policy at the September 3 policy meeting. This could cause even more headwinds for the euro.
- One of the indexes I like to monitor is the speculative sentiment index (SSI). This index shows that traders are still net-long with the EUR/USD Forex market. They have been since July. However please note that the ratio of long to short is now at -1.65 with 38 percent of traders remaining long in this Forex market.
Economic Calendar
There is quite a bit of economic news on the calendar this week. The European Union (EU) will be releasing a plethora of data which includes the Consumer Price Index (today) and German unemployment numbers (tomorrow) which includes the employment rate. All of this culminates with the ECB policy meeting beginning on September 3. As mentioned above we could see more monetary easing out of the ECB.
The United States is also not quiet this week. On Tuesday we will see the ISM manufacturing numbers, but all eyes will be on Friday’s non-farm payroll report as the Fed is keenly watching all data before making a decision whether or not to raise rates and normalize policy. It is likely they will hold off till December before making any rate increase.
