FxGrow Fundamental Analysis – 05th April, 2017
By FxGrow Investment Research Desk
EUR/USD Steadies Ahead of local Data, Eyes on FOMC Meeting
Last week, EUR/USD witnessed an intensive decline and the pair plunged to 1.0649 on Friday after peeking to 1.0906 last Monday. This week, the pair was confined with 50-pips as price action and prolonged the third consolidation consecutive session with a weekly high at 1.0685. Although U.S Dollar has awakened with a 100.59 high yesterday, market is showing some immunity by other currency rivals due to overall political uncertainties and economies are shifting courses at a high pace, add to that, mixed data leaving markets confused and cautious trading.
According to the analysts at Danske Bank, if we are close to a peak in inflation and they are right that the pricing of hikes in the Eurozone will prove premature, EUR/USD should stay under pressure in coming months and fall back towards 1.05 as close-to-neutral positioning in the cross makes room for a revival in relative rates. Eurozone still has many obstacles to overcome before the whole image is drawn, especially the French coming elections and Frexit is already on tongues.
This week, currency majors traded narrow as analysts awaits FOMC meeting minutes today and U.S NFP this Friday which should create higher volatility despite a negative or positive outcome especially EUR/USD. Local EURO services PMI is expected to have minor volatility. The main focus will be on tonight's FOMC meeting with eyes and ears focused on every word, trying to decipher messages, and the process of pricing the market could start all over again and FOMC members will do their best of avoid this scenario.
1- EUR - Final Services PMI today at 7:00 AM GMT.
2- USD - FOMC Meeting Minutes today at 6:00 PM GMT.
3- USD - Non-Farm Payrolls on Friday at 12:30 PM GMT.
Remark : U.S Data is heavy this week, but market poised and tied with FOMC meeting and NFP result, which leaves other data less significant.
Trend: Bearish / Sideways
Resistance levels : R1 1.0712, R2 1.0771, R3 1.0826, R4 1.0877
Support levels : S1 1.0632, S2 1.0589, S3 1.0532, S4 1.0478
Summary: Overall, the pair remains under pressure by strong U.S Index and market to consider EUR/USD bearish. But economic data this week will determine the trend further more. A penetration for S1 level will increase further selloffs and wash towards S2. A break below S2 level warns for additional intensive declines towards S3&S4. Any close below 1.07 is negative. Rallies that stay capped by 1.0800 should maintain bear forces. Closing above R3 level, traders to take it as sign for shifting trend course and above R4, uptrend is 100% confirmed. Be careful from setbacks as a first test on S&R levels due to high volatility.
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Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.