The continuous strengthening of the American dollar is becoming a concern for central banks which are starting to consider the possibility of intervening. The USD’s strength is affecting the commodities’ low prices, inflation and oil prices, which reflected on oil-producing countries; such as the GCC.
We might witness a wave of profit taking for the USD today, which means that the EUR may rise. However, the daily trend is neutral; awaiting any hint to take action.
The worse-than-expected data released from the US, the intervention from the FED and central banks and the upcoming news about the interest rate increase might all add up and determine if the dollar will continue to rally or whether other currencies will rebound.
The EUR/USD already tested the 1.2360 level and it might try to test it again. As it’s a critical movement, please watch it closely.
The Gold rallied last Friday, and witnessed a massive corrective move after weeks of losses against the USD. This might be an indicator for the current week’s movements.
Here are the major Resistance (R) & Support (S) levels of the EUR/USD:
S2: 1.2301
S1: 1.2416
Pivot Point: 1.2480
R1: 1.2550
R2: 1.2613
As for today’s figures, we’ll start from Europe, with the Investor Confidence Index, which rates the relative six-month economic outlook for the euro zone. The data is compiled from a survey of about 2,800 investors and analysts. A reading above zero indicates optimism; while a reading below zero indicates pessimism.
Forecast: -6.9
Previous: -13.7
A higher than expected reading should be taken as positive for the EUR, while a lower than expected reading should be taken as negative for the EUR.
Moving to Canada, the Housing Starts announcement is scheduled for release today, measuring the change in the annualized number of new residential buildings that began construction during the reported month.
Forecast: 200.0K
Previous: 197.3K
A higher than expected reading should be taken as positive for the CAD, while a lower than expected reading should be taken as negative for the CAD.
As for the US, the eight labor-market indicators listed below aggregated into the Employment Trends Index will be released:
1. The Percentage of respondents who say they find "Jobs Hard to Get" (The Conference Board Consumer Confidence Survey).
2. The Initial Claims for Unemployment Insurance (US Department of Labor).
3. The Percentage of Firms With Positions Not Able to Fill Right Now (National Federation of Independent Business).
4. The number of the employees hired by the temporary-help industry (US Bureau of Labor Statistics).
5. Part-time Workers for Economic Reasons (BLS).
6. The Job Openings announcement (BLS).
7. The Industrial Production announcement (Federal Reserve Board).
8. Real Manufacturing and Trade Sales announcement (US Bureau of Economic Analysis).
Forecast: N/A
Previous: 121.70
A higher than expected reading should be taken as positive for the USD, while a lower than expected reading should be taken as negative for the USD.
Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.
Engaging in CFDs or Spot FX carries a high risk to your capital. You should not engage in this form of investing unless you understand the nature of the Transaction you are entering into and the true extent of your exposure to the risk of loss. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based.