Forex Market: EUR/USD daily trading forecast

Yesterday’s trade saw EUR/USD within the range 1.0994-1.1095. The pair closed at 1.1048, up 0.48% on a daily basis and marking a third consecutive trading day of gains. The daily rate of change has also been the steepest since June 29th, when EUR/USD appreciated 2.38%.

At 8:58 GMT today EUR/USD was down 0.74% for the day to trade at 1.0974. The pair broke the daily S1 level and touched a daily low at 1.0961 at 8:54 GMT. It has been the lowest level since June 29th, when a daily low of 1.0953 was recorded.

Fundamentals

Euro area

EU Leaders Special Summit

Leaders and Finance Ministers from the 19 EZ Member States are expected to hold a special meeting today in order to seek resolution to the Greek debt crisis.

In a response to the Sunday referendum, German Chancellor Angela Merkel stressed that Greek policy makers were running out of time in their attempt to keep the country within the Euro area. “The last offer that we made was a very generous one,” Angela Merkel said yesterday at the Elysee Palace in Paris, cited by Bloomberg. “On the other hand, Europe can only stand together, if each nation takes on its own responsibility.”

Meanwhile, the period of bank closure in Greece has been extended through Wednesday. According to a Greek government official, who wished to remain anonymous, Greek PM Tsipras conducted a phone call with the European Central Bank President, Mario Draghi and requested the lifting of capital controls.

According to Bloomberg, during a conference call on Monday Euro region finance officials made a small step further towards bridging the gap between Greece and its trio of creditors.

United States

Balance of Trade

The deficit on US balance of trade probably expanded to USD 42.60 billion during June, according to market expectations, from a trade gap of USD 40.88 billion, registered in May. The latter has been the lowest shortfall since February 2015, when a deficit of USD 35.40 billion was reported. Total exports went up 1% to USD 189.9 billion in April. Exports of goods increased USD 1.9 billion to reach USD 129.0 billion in April, exports of capital goods advanced USD 2.1 billion, exports of civilian aircraft were up USD 1.0 billion, while exports of telecommunications equipment increased USD 0.6 billion. Total imports contracted 3.3% to USD 230.78 billion in April. Imports of goods went down USD 7.4 billion to reach USD 189.6 billion in April, imports of consumer goods dropped USD 4.9 billion, imports of cell phones and other household goods fell by USD 1.3 billion, while imports of other textile apparel and household goods were down USD 0.9 billion.

The trade balance, as an indicator, measures the difference in value between the 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 the Gross Domestic Product. Generally, exports are linked to economic growth, while imports indicate how strong domestic demand is. In case the trade balance deficit expanded more than anticipated, this would trim demand for the greenback. The Bureau of Economic Analysis will release the official trade data at 12:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1046. In case EUR/USD manages to breach the first resistance level at 1.1097, it will probably continue up to test 1.1147. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1198.

If EUR/USD manages to breach the first key support at 1.0996, it will probably continue to slide and test 1.0945. With this second key support broken, the movement to the downside will probably continue to 1.0895.

The mid-Pivot levels for today are as follows: M1 – 1.0920, M2 – 1.0971, M3 – 1.1021, M4 – 1.1072, M5 – 1.1122, M6 – 1.1173.

In weekly terms, the central pivot point is at 1.1115. The three key resistance levels are as follows: R1 – 1.1276, R2 – 1.1442, R3 – 1.1603. The three key support levels are: S1 – 1.0949, S2 – 1.0788, S3 – 1.0622.