Wednesday’s trade saw EUR/HKD within the range of 10.2369, the lowest since September 9th, and 10.1945. The pair closed at 10.2224, adding 0.15% on a daily basis and snapping three days of declines.
At 7:13 GMT today EUR/HKD was up 0.16% for the day to trade at 10.2415. The pair ranged between days and high of 10.2213 and 10.2453, respectively.
Fundamental view
Eurozone business and consumer confidence
The European Commission is expected to report at 9:00 GMT that its index of executive and consumer sentiment fell in August to the lowest in half a year. The Economic Sentiment indicator is projected to register at 101.5, compared to 102.2 in July, the weakest since February.
Business Climate is projected to have worsened, with the respective indicator scoring at 0.1 from 0.2 in July, while consumer confidence also likely fell, touching -10.00, compared to -8.40 in July.
Like with other economies, here consumer confidence is considered as a leading indicator as well as it has a predictive value for consumer spending, which itself is a major part of GDP. The reading is based on a survey of about 2 300 consumers within the Eurozone, which are asked to evaluate the economic prospects ahead.
Industrial sentiment is also expected to have worsened in August, with the corresponding indicator projected to have fallen to -5.0 from -3.8 in July.
Spain
Spain’s economy grew by at an annualized 1.2% pace in the second quarter, the National Institute of Statistics reported, following a 0.5% rise in economic output in the first quarter and matching projections. Quarter-on-quarter, the Spanish economy achieved an expansion rate of 0.6%, compared to 0.4% in the previous three months and also matching expectations.
Spain’s annualized index of consumer prices (CPI) fell 0.5% in August, a preliminary reading showed, after contracting by 0.3% in July. The index measures the change in price levels of a basket of goods and services from consumer’s perspective and also reflects purchasing trends. In case the CPI dropped more than projected, this would have a bearish effect on the euro. The National Institute of Statistics will release its official report at 7:00 GMT.
Spain’s annualized CPI, evaluated in accordance with Eurostat’s harmonized methodology, marked a 0.5% decline in August, compared to a 0.4% contraction in July, beating projections for a 0.6% decline.
Germany
The number of unemployed people in Germany probably dropped by 5 000 in August, according to the median forecast by experts, after a decline of 12 000 during July. A possible decrease is indicative of a more active consumer spending, while the latter is tightly related to economic growth. At the same time, the seasonally adjusted rate of unemployment in the country probably remained unchanged at 6.7%. In case the number of the unemployed Germans decreases more than projected and the unemployment rate drops, this would have a bullish effect on the euro. Germany’s Statistics Office will release the official data at 7:55 GMT.
Later in the day, at 12:00 GMT, Germany’s Federal Statistical Office will likely report that its preliminary annualized Consumer Price Index probably rose by 0.8% in August, matching July’s rise. Month-on-month, consumer prices are expected to have remained flat, compared to a 0.3% rise in July.
The index presents a general picture of the price change in the country, while encompassing all household types, all regions and all goods and services demanded (food, clothing, automobiles, rental, repair and hairdressing services etc). The index is based on a basket of goods and services, which is regularly renewed, so that goods and services, purchased more often by consumers, are included in the present survey.
The leading EU nation’s preliminary annualized CPI, evaluated in accordance with the harmonized methodology, probably also matched July’s 0.8% rise, while on a monthly basis Germany’s HICP was flat.
In case the CPI came below expectations and distanced further from the 2-percent inflation objective, set by the European Central Bank, this would mount selling pressure on the euro. Destatis is scheduled to publish the CPI report at 12:00 GMT.
Italy
Italy’s National Institute of Statistics is likely to report at 08:00 GMT that retail sales in the Eurozone’s third-largest economy fell by an annualized 0.9% in June, compared to a 0.5% decline in May. Month-on-month, retail sales probably contracted by 0.2% following a -0.7% reading during the preceding period.
A separate report by the Organisation for Economic Co-operation and Development is poised to show that business confidence in Italy fell in August to the lowest since March. The corresponding indicator probably slipped to 99.3 from 99.7 in July.
Hong Kong
Annualized retail sales in Hong Kong probably decreased at a pace of 2.5% in July, according to the median estimate by experts, following another 6.9% drop in June. If confirmed, this would be the sixth straight month of contraction in purchases at retail stores.
This indicator reflects the change in the total value of inflation-adjusted sales by retailers in the country and provides key information regarding consumer spending trend, while the latter is a key driving force behind economic growth. In case retail sales index dropped at a faster-than-expected pace, this would have a bearish effect on the national currency. The Census and statistics department is expected to release the official report at 8:30 GMT.
Technical view
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 10.2179. In case EUR/HKD manages to breach the first resistance level at 10.2414, it will probably continue up to test 10.2603. In case the second key resistance is broken, the pair will probably attempt to advance to 10.2838.
If EUR/HKD manages to breach the first key support at 10.1990, it will probably continue to slide and test 10.1755. With this second key support broken, movement to the downside will probably continue to 10.1566.
The mid-Pivot levels for Monday are as follows: M1 – 10.1661, M2 – 10.1873, M3 – 10.2085, M4 – 10.2297, M5 – 10.2509, M6 – 10.2721.
In weekly terms, the central pivot point is at 10.2984. The three key resistance levels are as follows: R1 – 10.3493, R2 – 10.4365, R3 – 10.4874. The three key support levels are: S1 – 10.2112, S2 – 10.1603, S3 – 10.0731.
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