Yesterday, before the closing session, heavy trades affected the prices and slashed the EUR/USD rate. It seemed that investors didn’t consider Friday’s U.S. jobs data as enough to change the FED’s plans regarding an interest rate hike, and that the USD still has an opportunity for a further upward trend.
The euro faced more pressure, as a report from Italy showed that the country fell back into a recession, as its economy contracted by 0.2% in the 2nd quarter of the year.
Now, the euro might retest its previous 26-month low, which was recorded on Friday. These attempts could give momentum to the USD, which may lead the EUR/USD to break below 1.2300.
Here are the major Resistance (R) & Support (S) levels of the EUR/USD:
S2: 1.2281
S1: 1.2356
Pivot Point: 1.2410
R1: 1.2495
R2: 1.2573
As for today’s fundamental news, it will include the National Federation of Independent Business (NFIB) Small Business Optimism Index that’s scheduled for release in the U.S. It’s a composite of ten seasonally adjusted components, which accounts of roughly 50% of the nation's private workforce.
Forecast: 95.1
Previous: 95.3
From the U.S., as well, the Johnson Redbook Index will be released; it’s a sales-weighted of year-over-year same-store sales growth in a sample of large US general merchandise retailers representing about 9,000 stores. Measured in dollars, the Index represents over 80% of the equivalent 'official' retail sales series collected and published by the US Department of Commerce.
Forecast: N/A
Previous: 0.2%
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.
Moving to New Zealand, Graeme Wheeler is expected to speak today. He is the Governor of the Reserve Bank and responsible for New Zealand's currency value as well as setting the monetary policy. The Reserve Bank's primary function, as defined by the Reserve Bank of New Zealand Act 1989, is to provide stability in the general level of prices.
As for Japan’s news, the Tertiary Industry Index is scheduled for release, measuring the change in the total value of services purchased by businesses. A higher than expected reading should be taken as positive for the JPY, while a lower than expected reading should be taken as negative for the JPY.
Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance. 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.