Forex Market: EUR/USD daily forecast

During yesterday’s trading session EUR/USD traded within the range of 1.3598-1.3640 and closed at 1.3622.

At 7:26 GMT today EUR/USD was losing 0.03% for the day to trade at 1.3616. The pair touched a daily low at 1.3605 at 6:35 GMT.

Fundamental view

Euro zone

The ZEW economic sentiment in Germany probably deteriorated to 28.0 this month, according to the median experts’ forecast. In June, the index came in at 29.8, which was the weakest since December 2012.

The ZEW (Zentrum für Europäische Wirtschaftsforschung) economic expectations index is published monthly. The study involves 350 financial experts. The indicator reflects the difference between the share of analysts that are optimistic and those that are pessimistic about the expected economic development in Germany over the next six months. A positive figure indicates that the proportion of optimists is larger than that of the pessimists.

In addition, the ZEW economic sentiment index in the Euro zone probably jumped to 62.3 this month, according to the median analysts’ estimate. In June, the index came in at 58.4.

Higher-than-projected readings would certainly provide support to the 18-nation common currency. The official data is to be released at 9:00 GMT.

United States

Retail Sales in the US probably jumped 0.6% in June from a month ago, when they gained 0.3%.

The indicator includes the total volume of wholesale and retail sales (cash or credit) of companies, mainly specializing in the retail sector. Sales are measured net, after deduction of the costs of refinancing. They do not include taxes paid by the buyer directly to the local government or the federal budget. These calculations measure the value of the operations used mostly by stores, whose main activity is retail sales. The index excludes retail sales made ​​by manufacturers, wholesalers, and other core businesses who operate in sectors, other than the retail sector. This is the percentage change in the index from the previous month.

At the same time, retail sales, excluding sales of autos or core retail sales probably rose 0.6% last month, after adding 0.1% in the prior month. Sales of autos, which comprise about 20% of total retail sales are excluded from the index, because their high volatility distorts the overall trend. Therefore, data without auto sales is considered a better indicator of the changing market trend. This is the percentage change in the index from the previous month.

Higher-than-expected readings would have a bullish effect on the greenback. The US Census Bureau will release an official report at 12:30 GMT.

In addition, the NY Empire State Manufacturing Index in the US probably declined to 17.0 in July from 19.28 in the preceding month that was the highest since March 2012.

The index is based on the results of the monthly Empire State Manufacturing Survey. It is conducted in the beginning of each month among roughly 200 executives of manufacturing companies. Participants are asked to share their opinions about different indicators for the preceding month and their 6-month forecast as well, measuring their sentiment. The result is calculated as the difference between the positive and the negative answers. Values above zero are indicative of expansion in manufacturing activity.

The Federal Reserve Bank of New York will publish its official report at 12:30 GMT. In case manufacturing activity in the state of New York expanded more than expected, this would boost greenback’s demand.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/USD manages to breach the first resistance level at 1.3642, it will probably continue up to test 1.3662. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3684.

If EUR/USD manages to breach the first key support at 1.3600, it will probably continue to slide and test 1.3578. With this second key support broken, the movement to the downside will probably continue to 1.3558.