The strong NFP and the unexpected data drove the USD higher against the EUR. At the moment, the Euro is trading below 1.2300; although after the European Central Bank (ECB) meeting, we were expecting the euro to break below this level. But, the central bank failed to meet the stretched expectations.
The EUR/USD is about either to break downward to around 1.20 or to witness a slightly bullish movement above these current levels.
Here are the major Resistance (R) & Support (S) levels of the EUR/USD:
S2 1.2174
S1 1.2253
Pivot Point 1.2290
R1 1.2370
R2 1.2420
As for today’s figures, a few financial data are expected to be released. Starting with China, the Trade Balance announcement will be revealed, measuring the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported.
Actual: 54.47 B
Forecast: 43.15 B
Previous: 45.41 B
A higher than expected reading should be taken as positive for the CNY, while a lower than expected reading should be taken as negative for the CNY.
From Germany, the core engine of the European region economy, the German Industrial Production announcement will be released; measuring the change in the total inflation-adjusted value of output produced by manufacturers, mines and utilities.
Forecast: 0.2%
Previous: 1.4%
A higher than expected reading is considered positive for the EUR, while a lower than expected reading is considered negative for the EUR.
As for Canada, the Building Permits announcement is scheduled for release, measuring the change in the number of the new building permits issued by the government. Building permits are a key indicator of the demand in the housing market.
Forecast: 2.1%
Previous: 12.7%
A higher than expected reading is usually considered positive for the CAD, while a lower than expected reading should be taken as negative for the CAD.
From New Zealand, the Electronic Card Retail Sales announcement will be released. It provides information about the number and value of electronic card transactions with New Zealand-based merchants. The data includes transactions using debit, credit and charge cards. The transactions by overseas cardholders in New Zealand are included; while the transactions by New Zealand cardholders overseas are excluded.
The figure gives a hint of strength in the retail sector and influences the interest rate decisions.
Forecast: 0.2%
Previous: 1.0%
A reading that is stronger than forecast is generally supportive for the NZD, while a weaker than forecast reading is generally negative for the NZD.
And finally from Japan, the Monetary Aggregates (also known as “the Money Supply”) announcement is scheduled for release; it’s the quantity of the available currency held by the country’s economy in order to purchase goods and services.
Depending on the degree of liquidity chosen to define an asset as money, various Monetary Aggregates are distinguished as: M0, M1, M2, M3, M4, etc. Not all of them are used by every country.
Note that the method of calculating the money supply varies between countries.
M2 is a Monetary Aggregate which includes all physical currency circulating in the economy (banknotes and coins), operational deposits in central bank, money in current and saving accounts, money market deposits and small certificates of deposit. The potential excess in the money supply can cause inflation and generate fears concerning the tightness of the money supply growth made by the government; by raising the interest rates, which in turn, lowers the future prices.
M2 = Currency in circulation + demand deposits (private sector) + time and savings deposits (private sector).
Forecast: 3.2%
Previous: 3.2%
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.
We wish you luck in your trading activities. For any further assistance, please do not hesitate to contact us at analysis@ICMCapital.co.uk.
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.
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.