Forex EUR/USD USD/JPY GBP/USD USD/CHF USD/CAD AUD/USD NZD/USD EUR/GBP EUR/JPY

EUR/USD: Dollar’s Strength Becoming A Concern

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 impacting commodity prices and inflation. Gulf Cooperation Council (GCC) states, in particular, have been impacted by lower oil prices.

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 hints of intervention.

The worse-than-expected data released from the US on Friday, possible intervention from the FED and central banks and expectations of US interest rate hikes will be key in determining whether the dollar will continue to rally or whether other currencies will rebound.

The EUR/USD has already tested the 1.2360 level and it might try to test it again. As it’s a critical movement, please watch it closely.

Gold rallied on 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

 

S1

 

Pivot Point

 

R1

 

R2

 

1.2301

 

1.2416

 

1.2480

 

1.2550

 

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.

We wish you luck in your trading activities. For any further assistance, please do not hesitate to contact us at [email protected] at the Research & Analysis Department.

FOREX trading is not suitable for everyone, as it contains a high risk of losing your investment. This article shall not be seen as a recommendation as it’s to assist readers and give them a better understanding of market movements. 

Avatar
Rate this post
Total: 0 Average: 0

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.