Last week was a continuation of our range bound trading that began Feb. 8th, and except for the fake out provided by Bernanke and friends on Thursday with the Fed discount rate hike, we continue to be range bound. Now that price action has returned to pre-release levels, I believe it shows that we are locked into a battle of fundamental and technical forces and that the parameters have been set to watch for a breakout. A return and close above 1.3800 would mean we are definitely going back up before we go down any further, while a return back below 1.3540 would mean sentiment has become more bearish and I would look for a move down to the 1.3300’s before we stall out again. My personal opinion is that we will see it reach 1.3300 and then become range bound again between that level and the current price level before the NFP is released on march 5th, at which point we could see this currency pair reach the lower 1.3100’s. But that’s just my speculation, I’ll still be watching the fundamentals and technicals very closely each day leading up to the NFP since I’m sure Greece will pop back into the headlines as the euro zone politicians continue their reluctance to deal with the 800 lb. gorilla in the room.
Here are the news events to watch for effecting the EUR/USD.
Tuesday at 4;00 am, German Ifo Business Climate comes out and generally has a decent effect on the market due to its large sample size (7,000) and historic correlation with German and wider Eurozone economic conditions.
Tuesday at 10:00 am, CB Consumer Confidence is released, a survey of about 5,000 households, measures the financial confidence of US citizens and would lend support to the idea of U.S. stability if the numbers come out at or above the forecasted 55. This has occurred three months in a row now since November so this report combined with the German Ifo Business Climate report could be a momentum builder to break this currency pair out of its’ ranges.
Wednesday at 10:00 am, several things are happening. Bernanke will be testifying and could drop one or two surprises so don’t be caught off guard that day. Also at the same time, U.S. new Home Sales data is released, so watch for that.
Thursday will see some lower level importance news coming out of the euro zone: German Unemployment Change and Consumer Confidence. But the big ones will be out of the U.S. with Core Durable Goods and Unemployment Claims both coming out at 8:30 am. Thursday’s have been some of the most active days we’ve seen so definitely still pay those reports some attention.
Friday at 5:00 am we’ll see CPI y/y and Core CPI y/y coming out of the euro zone. Forecasts and actual figures have been very close on both of these reports since November, so I would only watch for a big difference in numbers to occur in order to see these reports have any significant impact.
Friday at 10:00 am will be U.S. Existing Home Sales. With the U.S. tax credit coming to an end, look for some potential big differences in the forecasts and the actual numbers on this report as well.
Most Popular Posts