Forex Market: EUR/USD daily trading outlook

Yesterday’s trade saw EUR/USD within the range of 1.0957-1.0802. The pair slid 0.98% to 1.0816, after it dropped 0.65% the prior session.

At 7:02 GMT today EUR/USD was up 0.35% for the day to trade at 1.0853. The pair held in a daily range of 1.0808 – 1.0854.

Fundamentals

Eurozone

German factory orders, an indicator gauging the change in the total value of new purchase orders placed for durable and non-durable goods, fell 0.9% in February from a month earlier, following an upward-revised 2.6% decline in January. Factory orders are considered as a key indicator for analyzing the short-term trend in production in Germany. A decrease has a bearish effect on the euro, particularly a larger-than-expected one.

Frances trade deficit shrank to 3.44 billion euros in February from 3.71 billion a month earlier, beating projections to have widened to 3.8 billion euros. Exports rose to 37.3 billion from 36.8 billion euros in January, while imports were at 40.8 billion from 40.6 billion a month ago.

Annualized retail sales in the Euro region as a whole probably rose by 3.0% in February, according to the median forecast by experts, after in January sales climbed at a pace of 3.7%. If so, this would be the 14th consecutive period of growth. In monthly terms, retail sales probably decreased 0.2% in February after jumping for a fourth straight month in January, by 1.1%. This is a short-term indicator which provides key information about consumer spending trend on a national scale. In case the index of retail sales rose at a faster-than-projected pace, this would have a bullish effect on the euro. Eurostat is expected to publish the official data at 09:00 GMT.

United States

At 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on March 17-18th. The minutes offer detailed insights on FOMC’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. High volatility is usually present after the publication.

Officials dropped the “patient” stance at their last policy meeting but also downgraded their estimate on interest rates by the end of the year, citing the possible implications of an exceedingly strong dollar and struggling global growth. However, central bankers said an interest rate hike could come at any point from now on, although it was unlikely to happen in the next couple of meetings, pushing back broad market expectations for a June rate hike to September.

“When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent,” the March 17-18th FOMC meeting press release stated. “The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.”

Pivot points

According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 1.0858. In case it penetrates the first resistance level at 1.0915, it will encounter next resistance at 1.1013. If breached, upside movement may attempt to advance to 1.1070.

If the cross drops below its S1 level at 1.0760, it will next see support at 1.0703. If the second key support zone is breached, downward movement may extend to 1.0605.

In weekly terms, the central pivot point is at 1.0906. The three key resistance levels are as follows: R1 – 1.1100, R2 – 1.1222, R3 – 1.1416. The three key support levels are: S1 – 1.0784, S2 – 1.0590, S3 – 1.0468.