EURUSD: FOMC week
The ECB held its monetary meeting during the previous week and decided not to change its reference interest rate from the current 4.5%. At the same time members of the ECB team were optimistic regarding the state of economy, which heated market expectations on potential ECB rate cut in April this year. Still, ECB President Lagarde did not comment on such a move. Based on these expectations, Euro lost in value against USD during the week. As for other important news published for the EU economy, HCOB Manufacturing PMI Flash index for January for Germany reached 45.4, modestly higher from expected 43.7. The Ifo Business Climate for January in Germany reached level of 85.2 just slightly below market forecast of 86.7. German GfK Consumer Confidence for February was standing at -29.7, a bit above market estimate of -24.5.
The major news for the US economy during the previous week was the release of the preliminary GDP growth rate for Q4, which rose by 3.3% on a yearly basis. This was higher from estimated 2.0%, and further highly supported market optimism. Durable Goods orders remained at 0% in December last year, well below forecasted 1.1% increase, and from revised 5.5%. At the same time PCE Price Index in December was standing at 2.6% on a yearly basis, exactly in line with expectations, while core PCE Index was at level of 2.9%, a bit lower from forecasted 3.0%.
The currency pair started the previous week around level of 1.09 and was moving within a relatively short range. The highest-lowest range was between 1.092 and 1.081. The support line at 1.08 has been tested, without strength to be breached. The RSI was also moving in a short range around level of 43. Moving average of 50 days is moving as a parallel line to its MA200 counterpart. There is no indication that the indicator is ready to start its convergence, in order to make a cross in the coming period.
The week ahead is the FOMC week, where some increased volatility on markets can be expected. The eurusd was testing 1.08 support line, but it has not been breached on this occasion. It could be expected that testing of this line will continue at the start of the week ahead. Based on current charts, there is some probability for this line to be broken shortly, but only to test 1.075, which was the lowest level of the currency pair in December last year. A move to the upside might lead the currency pair toward 1.09 for one more time, with extremely low probability for next resistance at 1.10.
Important news to watch during the week ahead are:
Euro: Germany GDP Growth Rate Flash for Q4, Euro Area GDP Growth Rate Flash for Q4, Germany Unemployment Rate for January, Germany Inflation Rate preliminary for January, Euro Area Inflation Rate flash for January.
USD: CB Consumer Confidence for January, Fed Interest Rate Decision, ISM Manufacturing PMI for January, Non-Farm Payrolls for January, Unemployment Rate for January, Michigan Consumer Sentiment Final for January.
The major news for the US economy during the previous week was the release of the preliminary GDP growth rate for Q4, which rose by 3.3% on a yearly basis. This was higher from estimated 2.0%, and further highly supported market optimism. Durable Goods orders remained at 0% in December last year, well below forecasted 1.1% increase, and from revised 5.5%. At the same time PCE Price Index in December was standing at 2.6% on a yearly basis, exactly in line with expectations, while core PCE Index was at level of 2.9%, a bit lower from forecasted 3.0%.
The currency pair started the previous week around level of 1.09 and was moving within a relatively short range. The highest-lowest range was between 1.092 and 1.081. The support line at 1.08 has been tested, without strength to be breached. The RSI was also moving in a short range around level of 43. Moving average of 50 days is moving as a parallel line to its MA200 counterpart. There is no indication that the indicator is ready to start its convergence, in order to make a cross in the coming period.
The week ahead is the FOMC week, where some increased volatility on markets can be expected. The eurusd was testing 1.08 support line, but it has not been breached on this occasion. It could be expected that testing of this line will continue at the start of the week ahead. Based on current charts, there is some probability for this line to be broken shortly, but only to test 1.075, which was the lowest level of the currency pair in December last year. A move to the upside might lead the currency pair toward 1.09 for one more time, with extremely low probability for next resistance at 1.10.
Important news to watch during the week ahead are:
Euro: Germany GDP Growth Rate Flash for Q4, Euro Area GDP Growth Rate Flash for Q4, Germany Unemployment Rate for January, Germany Inflation Rate preliminary for January, Euro Area Inflation Rate flash for January.
USD: CB Consumer Confidence for January, Fed Interest Rate Decision, ISM Manufacturing PMI for January, Non-Farm Payrolls for January, Unemployment Rate for January, Michigan Consumer Sentiment Final for January.
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