Forex Market: EUR/USD daily forecast

During yesterday’s trading session EUR/USD traded within the range of 1.3336-1.3383 and closed at 1.3365, losing 0.13% for the day.

At 6:08 GMT today EUR/USD was losing 0.02% for the day to trade at 1.3366. The pair touched a daily low at 1.3360 at 2:35 GMT, breaching the first key weekly support level.

Fundamental view

Euro zone

The annualized index of consumer prices in France probably remained unchanged at 0.5% in July, according to the median forecast by experts, after it rose 0.5% in June. The index measures the change in price levels of a basket of goods and services from consumer’s perspective and also reflects purchasing trends. In case the CPI decreased, this would have a bearish effect on the euro. The National Institute for Statistics and Economic Studies will release the official report at 6:45 GMT.

France’s annualized CPI, evaluated in accordance with Eurostat’s harmonized methodology, probably remained intact at 0.6% in July, matching Junes reading. In monthly terms, the harmonized CPI probably dropped 0.3% last month, after being flat in June.

In addition, Spain’s final annualized index of consumer prices (CPI) probably declined 0.3% in July, unchanged from the preliminary estimate made on July 30th. The index measures the change in price levels of a basket of goods and services from consumer’s perspective and also reflects purchasing trends. In case the CPI drops less than projected, this would have a bullish effect on the euro. The National Institute of Statistics will release its official report at 7:00 GMT.

At the same time, the Spanish final annualized CPI, evaluated in accordance with Eurostat’s harmonized methodology, probably remained unchanged at -0.3% last month, matching the preliminary estimate.

Industrial production in the Euro zone probably rose 0.3% in June from the previous month, according to the median analyst’ estimate. In May, industrial output dropped 1.1%. On year-over-year basis, the index probably inched up 0.1% in June, following a 0.5% gain in the previous month.

Industrial production is an indicator of the business cycle that shows the activity and development in the industry as a whole, by measuring the change in volume for a certain period of time. Information on industrial production is raised through special studies for EU members, which are called Prodcom. They cover between 5 000 and 6 000 products. The index measures the percentage change from the previous month.

A larger than expected increase in the industrial output would heighten the appeal of the euro. The official report is due out at 09:00 GMT.

United States

Retail Sales in the US probably inched up 0.2% in July from a month ago, when they gained 0.2%.

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 0.4% last month, after adding 0.4% 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.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.3361. In case EUR/USD manages to breach the first resistance level at 1.3387, it will probably continue up to test 1.3408. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3434.

If EUR/USD manages to breach the first key support at 1.3340, it will probably continue to slide and test 1.3314. With this second key support broken, the movement to the downside will probably continue to 1.3293.

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.