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Friday’s trade saw EUR/HKD within the range of 9.8856-9.9595. The pair closed at 9.9007, losing 0.38% on a daily basis, while gaining 1.06% for the whole week.

Fundamentals

Euro zone

Euro zone current account

The surplus on Euro zones current account probably shrank to 18.3 billion EUR in August from 32.3 billion EUR in July. The latter has been the highest surplus figure since the all-time high of 32.91 billion EUR, registered in December 2013.

The current account reflects the difference between savings and investments in the Euro area. It is the sum of the balance of trade, net current transfers (cash transfers) and net income from abroad (earnings from investments made abroad plus money sent by individuals working abroad to their families back home, minus payments made to foreign investors).

A current account surplus indicates that the net foreign assets of the region have increased by the respective amount, while a deficit suggests the opposite. A nation with a surplus on its current account is considered as a net lender to the rest of the world, while a current account deficit puts it in the position of a net borrower. A net lender is consuming less than it is producing, which means it is saving and those savings are being invested abroad, or foreign assets are created. A net borrower is consuming more than it is producing, which means that other countries are lending it their savings, or foreign liabilities are created. A contracting surplus or an expanding deficit on the areas current account usually has a bearish effect on the euro.

The European Central Bank is expected to release the official data at 8:00 GMT on Monday.

Italian industrial orders

Also at 8:00 GMT Italy’s National Institute of Statistics is expected to release a report on industrial new orders in August. The annualized new orders (without a seasonal adjustment) dropped 0.7% in July, while in monthly terms the indicator registered a 1.5% decrease. 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 drops in value, this might have a limited bearish effect on the euro.

Hong Kong

The rate of unemployment in Hong Kong probably remained steady at 3.3% during the period July-September, according to the median forecast by experts. If so, this would be the third consecutive period, when the rate remained at this level. It represents the percentage of the eligible work force that is unemployed, but is actively seeking employment.

The number of unemployed persons (not seasonally adjusted) rose by approximately 3 100 from 133 300 in the period May-July this year to 136 400 in June-August. The number of underemployed persons dropped by 3 300 from 57 900 in the period May-July to 54 600 in June-August, according to data by the Census and Statistics Department.

Total employment rose by 18 900 from 3 771 100 during May-July to 3 790 000 in June-August. The labor force expanded by 22 000 to reach 3 926 400 in June-August.

In case the unemployment rate increased further, this would have a bearish effect on the local currency. The official employment data is due out at 8:30 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 9.9153. In case EUR/HKD manages to breach the first resistance level at 9.9449, it will probably continue up to test 9.9892. In case the second key resistance is broken, the pair will probably attempt to advance to 10.0188.

If EUR/HKD manages to breach the first key support at 9.8710, it will probably continue to slide and test 9.8414. With this second key support broken, the movement to the downside will probably continue to 9.7971.

The mid-Pivot levels for Monday are as follows: M1 – 9.8193, M2 – 9.8562, M3 – 9.8932, M4 – 9.9301, M5 – 9.9671, M6 – 10.0040.

In weekly terms, the central pivot point is at 9.8950. The three key resistance levels are as follows: R1 – 10.0008, R2 – 10.1008, R3 – 10.2066. The three key support levels are: S1 – 9.7950, S2 – 9.6892, S3 – 9.5892.

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