By FXEmpire.com
Introduction: Out of the major currency pairs the most popular and easy to trade currency pair is the EUR/USD. It has become so popular with traders these days that even when there is no visible trade to be had it is yet traded as a matter of habit. This is of course something that should be avoided and any investor who trades this currency pair wisely can do so successfully with sizable profits at the end of the day.
The first thing with trading currencies is to realize that the EUR/USD is made up of two separate currencies although considered to be one unit when taken as a pair. The weaknesses and strengths of each currency have to be taken into consideration when trading the unit as it influences the final outcome. Another factor that is often overlooked by traders or investors is that the weakening of one currency along with the strengthening of the other currency in the pair results in the generation of pips. It is according to this that entry and exit from the Forex market has to be done in order to maintain profitability.
- The interest rate differential between the European Bank(ECB) and the Federal Reserve(FED)
- Dollar strength drives EUR/USD lower
- FED intervention to weaken the dollar the sends EUR/USD higher
Weekly Analysis and Recommendation:
The EUR/USD ended the week at 1.2321. The euro had the biggest weekly gain versus the dollar since February as European Central Bank officials and national leaders pledged to support the shared currency amid surging sovereign-bond yields and concern the region’s financial crisis is worsening.
|
Date |
Open |
High |
Low |
Change % |
|
|
Jul 27, 2012 |
1.2321 |
1.2278 |
1.2390 |
1.2243 |
0.35% |
|
Jul 26, 2012 |
1.2278 |
1.2139 |
1.2329 |
1.2118 |
1.15% |
|
Jul 25, 2012 |
1.2139 |
1.2062 |
1.2169 |
1.2054 |
0.64% |
|
Jul 24, 2012 |
1.2062 |
1.2124 |
1.2138 |
1.2043 |
-0.51% |
|
Jul 23, 2012 |
1.2124 |
1.2128 |
1.2145 |
1.2068 |
-0.03% |
Equities slumped in the first three days of the week amid concern more of Spain’s regions will seek aid, while Moody’s Investors Service lowered outlooks for Germany, the Netherlands and Luxembourg. The S&P 500 then posted the biggest two-day rally since December, surging 3.6 percent, after speculation grew that the European Central Bank would buy bonds to ease borrowing costs for Spain and Italy.
ECB President Mario Draghi will hold talks with Bundesbank President Jens Weidmann in an effort to overcome the biggest stumbling block to a new raft of measures including bond purchases, two central bank officials said on condition of anonymity because the talks are private. German Chancellor Angela Merkel, French President Francois Hollande and Draghi pledged to do everything to protect the euro.
Economic reports showed the U.S. economy expanded at a slower pace in the second quarter as a softening job market prompted Americans to curb spending. Consumer confidence in July dropped to the lowest this year, new home sales unexpectedly fell from a two-year high while orders for equipment slumped.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthlyanalysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Major Economic Events for the week of July 23-27 actual v. forecast for Euro, GPB, the Franc, and USD
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jul 24 |
EUR |
French Flash Manufacturing PMI |
43.6 |
45.6 |
45.2 |
|
EUR |
French Flash Services PMI |
50.2 |
47.7 |
47.9 |
|
|
EUR |
German Flash Manufacturing PMI |
43.3 |
45.3 |
45.0 |
|
|
EUR |
German Flash Services PMI |
49.7 |
50.1 |
49.9 |
|
|
EUR |
Flash Manufacturing PMI |
44.1 |
45.3 |
45.1 |
|
|
EUR |
Flash Services PMI |
47.6 |
47.3 |
47.1 |
|
|
GBP |
BBA Mortgage Approvals |
26.3K |
31.4K |
29.6K |
|
|
USD |
Flash Manufacturing PMI |
51.8 |
52.1 |
52.5 |
|
|
Jul 25 |
EUR |
German Ifo Business Climate |
103.3 |
104.8 |
105.2 |
|
GBP |
Prelim GDP q/q |
-0.7% |
-0.2% |
-0.3% |
|
|
GBP |
CBI Industrial Order Expectations |
-6 |
-11 |
-11 |
|
|
EUR |
Belgium NBB Business Climate |
-11.3 |
-13.5 |
-13.2 |
|
|
USD |
New Home Sales |
350K |
372K |
382K |
|
|
USD |
Crude Oil Inventories |
2.7M |
-0.1M |
-0.8M |
|
|
Jul 26 |
EUR |
GfK German Consumer Climate |
5.9 |
5.9 |
5.8 |
|
EUR |
M3 Money Supply y/y |
3.2% |
2.9% |
3.1% |
|
|
USD |
Core Durable Goods Orders m/m |
-1.1% |
0.1% |
0.8% |
|
|
USD |
Unemployment Claims |
353K |
381K |
388K |
|
|
USD |
Durable Goods Orders m/m |
1.6% |
0.4% |
1.6% |
|
|
USD |
Pending Home Sales m/m |
-1.4% |
0.6% |
5.4% |
|
|
Jul 27 |
EUR |
German Prelim CPI m/m |
0.4% |
0.4% |
-0.1% |
|
CHF |
KOF Economic Barometer |
1.43 |
1.24 |
1.15 |
|
|
EUR |
Spanish Unemployment Rate |
24.6% |
24.7% |
24.4% |
|
|
USD |
Advance GDP q/q |
1.5% |
1.5% |
1.9% |
|
|
USD |
Revised UoM Consumer Sentiment |
72.3 |
72.0 |
72.0 |
Economic Highlights of the coming week that affect the Euro, GBP and CHF
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
Jul 30 |
30th-31st |
GBP |
Nationwide HPI m/m |
0.8% |
-0.6% |
|
7:00 |
EUR |
Spanish Flash GDP q/q |
-0.3% |
||
|
8:30 |
GBP |
Net Lending to Individuals m/m |
1.3B |
||
|
10:00 |
GBP |
CBI Realized Sales |
42 |
||
|
23:01 |
GBP |
GfK Consumer Confidence |
-29 |
||
|
Jul 31 |
6:45 |
EUR |
French Consumer Spending m/m |
0.4% |
|
|
7:55 |
EUR |
German Unemployment Change |
7K |
||
|
9:00 |
EUR |
CPI Flash Estimate y/y |
2.4% |
||
|
9:00 |
EUR |
Unemployment Rate |
11.1% |
||
|
Aug 1 |
1st-8th |
GBP |
Halifax HPI m/m |
1.0% |
|
|
7:15 |
EUR |
Spanish Manufacturing PMI |
41.1 |
||
|
7:45 |
EUR |
Italian Manufacturing PMI |
44.6 |
||
|
8:30 |
GBP |
Manufacturing PMI |
48.6 |
||
|
Aug 2 |
7:00 |
EUR |
Spanish Unemployment Change |
-98.9K |
|
|
7:15 |
CHF |
Retail Sales y/y |
6.2% |
||
|
7:30 |
CHF |
SVME PMI |
48.1 |
||
|
8:30 |
GBP |
Construction PMI |
48.2 |
||
|
11:00 |
GBP |
Asset Purchase Facility |
375B |
||
|
11:00 |
GBP |
Official Bank Rate |
0.50% |
0.50% |
|
|
11:45 |
EUR |
Minimum Bid Rate |
0.75% |
0.75% |
|
|
12:30 |
EUR |
ECB Press Conference |
|||
|
Aug 3 |
8:30 |
GBP |
Services PMI |
51.3 |
|
|
9:00 |
EUR |
Retail Sales m/m |
0.6% |
Click here a current EUR/USD Chart.
Originally posted here
