EURUSD: 1.08 the next target?
It was a relatively calm week, when fundamental data are in question, for both currencies. The US ISM Services PMI for January reached 53.4, a bit better from forecasted 52. The inflation rate on a monthly basis final data for December was standing at 0.2%.
Retail sales are slowing down within the Euro Area. The latest published data show a drop of -0.8% on a yearly basis in December last year. Although the figure was modestly better from -0.9% forecast, still, it shows that the Europeans are purchasing less from the year before. The inflation rate final for January in Germany was 2.9%, unchanged from the previous post.
Without a release of significant fundamental data, the currency pair was moving within a relatively short range during the week. The support line at 1.075 has been clearly tested, and it marked a short term reversal to the upside, but only till the level of 1.079. The RSI was moving between levels of 33 and 40, showing that the market is still not ready to start its path toward the overbought side. Moving average of 50 days currently moves as a parallel line with MA200, not indicating a potential to start with clear convergence.
Although the past week was relatively calm for eurusd, the week ahead might bring some increased volatility. This might come from fundamentals which will be posted for the US, like the inflation rate and retail sales for January. As the support line at 1.075 has been clearly tested during the week, some short reversal might be expected. As per current charts, the short term reversal might lead the currency pair modestly above the 1.08 resistance line. At this moment, there is no indication that the pair might break the 1.075 level to the downside in the week ahead. However, in case that this happens, then a move toward the 1.067 support will be open.
Important news to watch during the week ahead are:
Euro: ZEW Economic Sentiment Index for February for Euro Area and Germany, GDP Growth Rate second estimate for Q4 for Euro Area.
USD: Inflation Rate for January, Retail Sales for January, Building Permits preliminary for January, PPI for January, Michigan Consumer Sentiment preliminary for February.
Retail sales are slowing down within the Euro Area. The latest published data show a drop of -0.8% on a yearly basis in December last year. Although the figure was modestly better from -0.9% forecast, still, it shows that the Europeans are purchasing less from the year before. The inflation rate final for January in Germany was 2.9%, unchanged from the previous post.
Without a release of significant fundamental data, the currency pair was moving within a relatively short range during the week. The support line at 1.075 has been clearly tested, and it marked a short term reversal to the upside, but only till the level of 1.079. The RSI was moving between levels of 33 and 40, showing that the market is still not ready to start its path toward the overbought side. Moving average of 50 days currently moves as a parallel line with MA200, not indicating a potential to start with clear convergence.
Although the past week was relatively calm for eurusd, the week ahead might bring some increased volatility. This might come from fundamentals which will be posted for the US, like the inflation rate and retail sales for January. As the support line at 1.075 has been clearly tested during the week, some short reversal might be expected. As per current charts, the short term reversal might lead the currency pair modestly above the 1.08 resistance line. At this moment, there is no indication that the pair might break the 1.075 level to the downside in the week ahead. However, in case that this happens, then a move toward the 1.067 support will be open.
Important news to watch during the week ahead are:
Euro: ZEW Economic Sentiment Index for February for Euro Area and Germany, GDP Growth Rate second estimate for Q4 for Euro Area.
USD: Inflation Rate for January, Retail Sales for January, Building Permits preliminary for January, PPI for January, Michigan Consumer Sentiment preliminary for February.
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