Forex Market: EUR/USD at 1-year low, daily trading outlook

Fridays trading session saw EUR/USD hold in the range of 1.3196-1.3130. The pair closed at 1.3133, shedding 0.38% on a daily and 0.83% on a weekly basis.

At 9:07 GMT today EUR/USD was up 0.08% for the day to trade at 1.3144. The pair fell to a daily low of 1.3119, the lowest since September 6th, while day’s high stood at 1.3144.

Fundamental view

German economic growth

Destatis reported at 06:00 GMT today that the German economy matched projections and expanded at an annualized 0.8% rate in the second quarter, the lowest rate of growth since Q1 2013. This also matched a preliminary reading released on August 14th and trailed the preceding three months’ 2.5% expansion.

Quarter-on-quarter, the leading EU economy shrank by 0.2%, as expected, matching the preliminary reading and trailing the first quarter’s 0.7% growth.

Eurozone factory growth

Spain’s manufacturing activity growth eased in August, as anticipated, with the Spanish Manufacturing Purchasing Managers’ Index sliding to 52.8, marking a slowdown from 53.9 in July. Analysts had projected a drop to 53.1. This, however, was Spains ninth straight month of factory growth.

Activity in Italy’s sector of manufacturing unexpectedly contracted in August, with the corresponding PMI registering at a reading of 49.8, from 51.9 in May. Economists had projected a growth of 50.8. Values below the key level of 50.0 indicate decreased activity.

France’s final manufacturing PMI remained in the zone of contraction this month, but came in better than the preliminary PMI reading of 46.5, which was reported on August 21st. Frances Final Manufacturing PMI registered at 46.9 from 47.8 in July. This was the fourth straight month of contraction.

The final reading of Germany’s manufacturing PMI also disappointed, having trailed both the preliminary and last months value. Germanys factory growth came in at 51.4, down from 52.4 in July, and compared to preliminary estimates for a minor drop to 52.0.

The final manufacturing PMI in the Euro zone also trailed both the preliminary value and projections. The index fell to a 13-month low of 50.7, compared to the flash reading of 50.8 released earlier in August, and down from 51.8 in July. The PMI is based on a monthly survey, encompassing a sample of business entities, which represents private sector conditions in terms of new orders, output, employment, prices etc. Higher-than-expected readings would provide support to the common currency.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.3153. In case EUR/USD manages to breach the first resistance level at 1.3176, it will probably continue up to test 1.3219. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3242.

If EUR/USD manages to breach the first key support at 1.3110, it will probably continue to slide and test 1.3087. With this second key support broken, movement to the downside will probably continue to 1.3044.

The mid-Pivot levels for today are as follows: M1 – 1.3066, M2 – 1.3099, M3 – 1.3132, M4 – 1.3165, M5 – 1.3198, M6 – 1.3231.

In weekly terms, the central pivot point is at 1.3161. The three key resistance levels are as follows: R1 – 1.3192, R2 – 1.3251, R3 – 1.3282. The three key support levels are: S1 – 1.3102, S2 – 1.3071, S3 – 1.3012.