Forex Market: EUR/USD daily forecast

During yesterday’s trading session EUR/USD traded within the range of 1.3358-1.3425 and closed at 1.3371, losing 0.37% for the day.

At 6:43 GMT today EUR/USD was losing 0.13% for the day to trade at 1.3358. The pair touched a daily low at 1.3350 at 6:03 GMT, the pairs weakest since November 11th 2013.

Fundamental view

Euro zone

The preliminary Gross domestic product (GDP) in Italy, the third largest economy in the Euro zone, probably rose 0.1% in the second quarter from the previous quarter, when it declined 0.1%. At the same time, the Italian GDP may have risen 0.1% in the second quarter compared to year ago, following a 0.5% slump in the previous quarter.

The preliminary GDP is a gauge of economic activity. The index is defined as the difference between the value of all goods and services produced and the cost of raw materials that were used for their creation. GDP measured at market prices reflects production activities of local firms. The cost method is applied as follows: GDP = private cost + state definitive cost + gross fixed capital expenditure + change in inventories + investments in stocks, with the exception of those made ​​in precious metals + Import – Export. It is expressed as a percentage change from the previous quarter/year.

Higher than expected readings, would support euros demand. The National Institute for Statistics (Istat) is scheduled to release an official report at 9:00 GMT.

United States

The deficit on US trade balance probably widened to 44.900 billion USD during June from a deficit of 44.392 billion USD, registered in May. The trade balance, as an indicator, measures the difference in value between country’s exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form country’s Gross Domestic Product. Generally, exports reflect economic growth, while imports indicate domestic demand. In case the trade balance deficit contracted more than anticipated, this would provide support to US dollar. The Bureau of Economic Analysis will release the official figures at 12:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.3385. In case EUR/USD manages to breach the first resistance level at 1.3411, it will probably continue up to test 1.3452. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3478.

If EUR/USD manages to breach the first key support at 1.3344, it will probably continue to slide and test 1.3318. With this second key support broken, the movement to the downside will probably continue to 1.3277.

In weekly terms, the central pivot point is at 1.3414. The three key resistance levels are as follows: R1 – 1.3460, R2 – 1.3492, R3 – 1.3538. The three key support levels are: S1 – 1.3382, S2 – 1.3336, S3 – 1.3304.