Forex Market: EUR/USD daily forecast

During yesterday’s trading session EUR/USD traded within the range of 1.3372-1.3400 and closed at 1.3389.

At 6:22 GMT today EUR/USD was losing 0.01% for the day to trade at 1.3389. The pair touched a daily low at 1.3382 at 4:30 GMT, breaching the first key weekly support.

Fundamental view

Euro zone

Activity in Italy’s sector of manufacturing probably expanded in July, with the corresponding PMI coming in at a reading of 52.8, as expected by experts, from 52.6 in June. Values above the key level of 50.0 indicate increased activity. Markit Economics is expected to release the official data at 7:45 GMT.

France’s final manufacturing PMI probably remained in the zone of contraction for a third straight month in July, while confirming the preliminary PMI reading of 47.6, which was reported on July 24th. The official reading is due out at 7:50 GMT.

The final reading of German manufacturing PMI probably confirmed the preliminary value for July, with the index coming in at 52.9. Markit will release the official reading at 7:55 GMT.

The final manufacturing PMI in the Euro zone probably also confirmed the preliminary value for July, with the index remaining at 51.9. The official reading is scheduled to be released at 8:00 GMT. The PMI is based on a monthly survey, encompassing a sample of business entities, which represents private sector conditions in terms of new orders, output, employment, prices etc. Higher than expected readings would provide support to the 18-nation common currency.

United States

Employers in all sectors of economy in the United States, excluding the farming industry, probably added 225 000 new jobs in July, according to the median forecast by experts, after a job gain of 288 000 in June. The non-farm payrolls report presents the total number of US employees in any business, excluding the following four groups: farm employees, general government employees, employees of non-profit organizations, private household employees. The reading, released most often, varies between + 10 000 and as much as + 250 000 at times when economy is performing well. Despite the volatility and the possibility of large revisions, the non-farm payrolls indicator presents the most timely and comprehensive reflection of the current economic state. Total non-farm payrolls account for 80% of the workers, who produce the entire Gross Domestic Product of the United States. In case of a larger-than-expected gain in jobs, the US dollar would receive a boost.

Average Hourly Earnings probably increased 0.2% in July compared to June, when earnings rose by another 0.2%.

At the same time, the rate of unemployment in the country probably remained unchanged at 6.1% in July, matching Junes reading that was the weakest since July 2008. It represents the percentage of the eligible work force that is unemployed, but is actively seeking employment. A person who is not classified as employed or unemployed is excluded from the statistics. One counts as unemployed, if he/she falls in all of the following categories: he/she was unemployed during the last week; he/she is able bodied; he/she has been seeking employment for a period of at least four weeks, which end during the week when the research is conducted. People, who have been laid off and are awaiting to be hired again, are also classified as unemployed. In case the unemployment rate met expectations or even fell further, this would have a bullish effect on the greenback. The Bureau of Labor Statistics will release the official employment data at 12:30 GMT.

Activity in United States’ sector of services probably expanded during July, with the corresponding non-manufacturing PMI coming in at a reading of 56.0, according to expectations, from 55.3 in June. This is a compound index, based on the values of four equally-weighted components, that comprise it. These sub-indexes reflect seasonally adjusted new orders, seasonally adjusted employment, seasonally adjusted business activity and supplier deliveries.

The business report is based on data compiled from monthly replies to questions asked of over 370 purchasing and supply executives operating in over 62 different industries, which represent nine divisions from the Standard Industrial Classification (SIC) categories. Readings above the key level of 50.0 are indicative of expanding activity. In case market expectations are exceeded, US dollar will receive a boost. The Institute for Supply Management (ISM) is to release the official PMI reading at 14:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.3387. In case EUR/USD manages to breach the first resistance level at 1.3402, it will probably continue up to test 1.3415. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3430.

If EUR/USD manages to breach the first key support at 1.3374, it will probably continue to slide and test 1.3359. With this second key support broken, the movement to the downside will probably continue to 1.3346.

In weekly terms, the central pivot point is at 1.3467. The three key resistance levels are as follows: R1 – 1.3512, R2 – 1.3595, R3 – 1.3640. The three key support levels are: S1 – 1.3384, S2 – 1.3339, S3 – 1.3256.