Forex Market: EUR/USD daily forecast

During yesterday’s trading session EUR/USD traded within the range of 1.3455-1.3475 and closed at 1.3461.

At 6:07 GMT today EUR/USD was losing 0.14% for the day to trade at 1.3444. The pair touched a daily low at 1.3438 at 6:01 GMT, (the pair’s weakest since November 21st 2013), breaching the two key supports.

Fundamental view

Euro zone

The preliminary reading of Germany’s manufacturing PMI probably slowed down to 51.9 in July, from a final reading of 52.0 in the previous month. The official reading is to be released at 7:30 GMT.

At the same time, the preliminary manufacturing (PMI) in the Euro zone probably slowed down to 51.7 this month, from a final reading of 51.8 in the prior month, according to the median forecast by experts.

The index is based on a monthly survey, which includes carefully selected companies that are representative of the state of the private sector in the economy and track the changes in production, new orders, market share, employment and prices in the manufacturing sector. The PMI is the first economic indicator for each month, providing information on the changing economic conditions, significantly earlier than the official state statistics. It is presented as a scale from 1 to 100. Readings above 50 are connected with a positive outlook for economic growth. Conversely, values ​​below 50 indicate a less optimistic forecast. This is a preliminary value of the indicator.

The research group Markit Economics will release the official figures at 8:00 GMT.

In addition, the preliminary reading of Germany’s Services PMI in June probably slowed down to 54.5 this month, from a final reading of 54.6 in June. The official reading is to be released at 7:30 GMT.

The preliminary reading of Euro zone’s Services PMI probably slowed down to 52.6 in July, from a final reading of 52.8 in the preceding month. Markit Economics will report the official value at 8:00 GMT.

In case market expectations are exceeded, this will boost demand for the 18-nation common currency.

United States

The number of people in the United States, who filed for unemployment assistance for the first time during the week ended on July 19th, probably increased to 310 000 from 302 000 during the prior week. This is a short-term indicator, reflecting lay-offs in the country. In case the number of initial jobless claims rose less than projected, this would have a bullish effect on the greenback. The Department of Labor is to release the weekly report at 12:30 GMT.

At the same time, activity in United States’ manufacturing sector probably continued to expand during July, with the corresponding manufacturing PMI coming in at a reading of 57.5, according to expectations, from 57.3 in June. The Manufacturing Purchasing Managers’ Index (PMI) is a compound index, which represents manufacturing activity in 20 different industries. It is comprised by four equally-weighted components: seasonally adjusted employment, seasonally adjusted production inventories, seasonally adjusted new orders and supplier deliveries. The index is based on a survey of 300 purchasing managers.

If 100% of the respondents saw no change in conditions, the index will show a reading of 50.0. Therefore, readings above the key level of 50.0 are indicative of expanding activity in the sector of manufacturing, which usually supports the US dollar. The market research group Markit Economics is to release the official reading at 13:45 GMT.

In addition, at 14:00 GMT United States’ Census Bureau is to announce the results from the Survey of Construction, regarding sales of new, privately-owned residential buildings currently authorized by a building permit or started in areas not requiring a building permit. New home sales in the country probably declined by 5.3% to 0.475 million last month from 0.504 million in May.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.3464. In case EUR/USD manages to breach the first resistance level at 1.3472, it will probably continue up to test 1.3484. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3492.

If EUR/USD manages to breach the first key support at 1.3452, it will probably continue to slide and test 1.3444. With this second key support broken, the movement to the downside will probably continue to 1.3432.