Forex Market: EUR/USD daily trading outlook

Yesterday’s trade saw EUR/USD within the range of 1.1237 – 1.1154 to close 0.33% higher at 1.1207.

At 07:30 GMT today EUR/USD was up 0.02% for the day to trade at 1.1206. The pair held in a daily range of 1.1182 – 1.1220 and is down 1.3% for the week so far, following three consecutive weekly advances.

Fundamentals

Eurozone

Consumer sentiment in Germany continued its path of steady improvement in July, a report by GfK showed at 06:00 GMT, with the Germany GfK Consumer Climate coming in at a reading of 10.1. This compared to 10.2 in June, which was the highest in more than a decade, and is the fourth consecutive monthly reading of 10 or above.

The GfK Consumer Climate Indicator measures the level of consumer confidence in economic activity based on a survey of 2 000 consumers age 14 and above, asking them to rate the relative level of past and future economic conditions. The questionnaire focuses on income expectations, buying tendency and savings. The indicator is calculated as the difference between the number of positive and negative answers to the questions asked. Thus, if 100% of respondents provide positive feedback, this would result in a reading of 100, and vice versa, with 0 being the neutral level. A better-than-expected reading suggests growing optimism about the economic developments and provides support for the euro.

United States

The number of people in the United States who filed for unemployment assistance for the first time during the week ended June 20th probably increased to 272 000 from 267 000 in the previous seven days. The 4-week moving average, an indicator used to iron out week-to-week volatility, was at 276 750 last week, below the previous weeks average.

Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the count of claims dropped more than projected, this would have a bullish effect on the greenback.

The number of continuing jobless claims probably slid to 2 215 000 during the week ended June 13th from 2 222 000 during the previous period. This indicator reflects the actual number of jobless people and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago. The Department of Labor is to release its weekly statistics at 12:30 GMT.

A separate report by the Bureau of Economic Analysis is expected to show that personal spending in the United States probably rose 0.7% in May on a monthly basis, while personal income likely jumped 0.5%. Spending was flat in April, while income rose 0.4%. Higher-than-expected rates of increase imply good employment conditions and, are therefore dollar positive.

The Core Personal Consumption Expenditure Index, a gauge measuring the price of goods and services purchased by consumers for the purpose of consumption, likely rose 0.1% in May, which would be the fifth straight month of 0.1% growth. This measure excludes the more volatile food and energy items. The data are due out at 12:30 GMT.

Pivot points

According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 1.1199. In case it penetrates the first resistance level at 1.1245, it will encounter next resistance at 1.1282. If breached, upside movement may attempt to advance to 1.1328.

If the cross drops below its S1 level at 1.1162, it will next see support at 1.1116. If the second key support zone is breached, downward movement may extend to 1.1079.

In weekly terms, the central pivot point is at 1.1326. The three key resistance levels are as follows: R1 – 1.1464, R2 – 1.1575, R3 – 1.1713. The three key support levels are: S1 – 1.1215, S2 – 1.1077, S3 – 1.0966.