Forex Market: EUR/SGD forecast for Monday

During Friday’s trading session EUR/SGD traded within the range of 1.6755-1.6818 and closed at 1.6787, losing 0.21% for the day and 0.59% on a weekly basis.

Fundamental view

Euro zone

Annualized Producer Price Index (PPI) in Germany probably climbed to -0.7% in June, according to the median forecast by experts, from -0.8% in May. The index reflects the change in prices of a sample of products, sold by manufacturers during the respective period.

The PPI differs from the CPI, which measures the change in prices from consumer’s perspective, due to subsidies, taxes and distribution costs of different types of manufacturers in the country. In case producers are forced to pay more for goods and services, they are more likely to pass these higher costs to the end consumer. Therefore, the PPI is considered as a leading indicator of consumer inflation. In case the PPI improved more than projected, this would have a bullish effect on the euro. Statistisches Bundesamt Deutschland is to release the official data at 6:00 GMT on Monday (July 21st).

At 8:00 GMT Italy’s National Institute of Statistics is expected to release a report on industrial new orders in May. The annualized new orders rose 6.2% in April, while in monthly terms the indicator registered a 3.8% increase. It measures the change in value of new orders, received by industrial sector companies, for delivering a variety of products. Only enterprises with over 20 employees are included in the survey. New orders are closely related with future industrial activity. In case the indicator rose in value more than expected, this would provide support to demand for the euro.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.6788. In case EUR/SGD manages to breach the first resistance level at 1.6819, it will probably continue up to test 1.6850. In case the second key resistance is broken, the pair will probably attempt to advance to 1.6881.

If EUR/SGD manages to breach the first key support at 1.6754, it will probably continue to slide and test 1.6724. With this second key support broken, the movement to the downside will probably continue to 1.6692.