Yesterday’s trade saw EUR/USD within the range of 1.1317-1.1429. The pair closed at 1.1353, falling 0.39% on a daily basis, and extending losses from Friday last week.
At 7:59 GMT today EUR/USD was down 0.05% for the day to trade at 1.1348. The pair touched a daily low at 1.1322 during early Asian trade.
Fundamentals
Economic Sentiment by the ZEW
The gauge of economic sentiment in Germany probably improved to 55.0 in February, according to the median forecast by experts, from 48.4 in January. If so, this would be the highest index reading since February 2014, when it was reported at 55.7.
In October last year the index entered into negative territory for the first time since November 2012, slipping to -3.6.
The ZEW (Zentrum für Europäische Wirtschaftsforschung) economic expectations index is published on a monthly basis. The study encompasses up to 350 financial and economic analysts. The indicator reflects the difference between the share of analysts, that are optimistic and those, that are pessimistic about the expected economic development in Germany over the next six months. A positive value indicates that the proportion of optimists is larger than that of pessimists. A ZEW reading of -100 suggests that all analysts are pessimistic about the current developments and expect economic conditions to deteriorate. A ZEW reading of 100 implies that all analysts are optimistic about the current situation and expect conditions to improve. A ZEW reading of 0 indicates neutrality.
The index of current assessment in Germany probably rose to a value of 30.0 in February from 22.4 in the prior month. If so, this would be the highest level since August 2014, when a value of 44.3 was reported.
The ZEW Economic Sentiment index for the whole Euro zone probably continued gaining ground in February, reaching 52.0. If so, this would be the highest level since June 2014, when the indicator came in at 58.4. In January the index stood at 45.2.
In case the gauge of economic sentiment exceeded expectations, this would certainly have a positive impact on the common currency. The official data is scheduled to be released at 10:00 GMT.
Greek debt negotiations break down
Yesterday Greece rejected a proposal to request a six-month extension of the international bailout package, considering it as “unacceptable”. The country was given time until Friday to request an extension, or the bailout would expire at the end of February.
“I have no doubt that, within the next 48 hours Europe, is going to come together and we shall find the phrasing that is necessary so that we can submit it and move on to do the real work that is necessary,” Greek Finance Minister Yanis Varoufakis said during a news conference, cited by Reuters.
United States
NY Empire State Manufacturing Index
The New York Empire State Manufacturing Index probably dropped to a reading of 9.00 in January, according to the median forecast by experts, from 9.95 in the prior month. In November the gauge slipped into negative territory, falling to -1.23, or the lowest level since November 2013, when a reading of -2.21 was reported.
The index is based on the monthly Empire State Manufacturing Survey, which is conducted by the Federal Reserve Bank of New York. About 200 top manufacturing executives respond to a questionnaire, sent out during the first day of the month. They provide their estimates in regard to the performance of several business indicators from the prior month, while also forecasting performance during the upcoming six months.
The ”general business conditions” component of the index is based on a distinct question, posed on the Empire State Manufacturing Survey, which means it is not a weighted average of the other indicators. These indicators, which are only applicable to the manufacturing facilities of survey respondents in the region of New York, include new orders, shipments, unfilled orders, delivery time, inventories, prices paid, prices received, number of employees including contract workers, average employee work week, technology spending and capital expenditures.
The general business conditions component and the sub-indexes for the 11 indicators are calculated by subtracting the percentage of respondents, rating an indicator as ”lower” (a drop), from the percentage of respondents, rating the same indicator as ”higher” (an increase). In case 33% of survey respondents stated that business conditions had improved during the current month, 50% stated that conditions had not changed, and 17% of the respondents stated that conditions had deteriorated, the index would have a reading of 16. Readings above 0.00 are indicative of improving business conditions in the region. Lower-than-anticipated index values will usually have a negative effect on the US dollar. The Federal Reserve Bank of New York is expected to release the official reading at 13:30 GMT.
NAHB Housing Market Index
The National Association of Home Builders (NAHB) Housing Market Index probably rose in February, reaching 58.0, according to expectations, from 57.0 in January. If so, this would be the eighth consecutive month, when the gauge stood in the area above 50.0. The indicator is based on a monthly survey in regard to current home sales and expected sales in the coming six months. Values above the key level of 50.0 indicate that housing market conditions are good. Therefore, higher-than-projected readings would provide support to the greenback. The official data is scheduled for release at 15:00 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1366. In case EUR/USD manages to breach the first resistance level at 1.1416, it will probably continue up to test 1.1478. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1528.
If EUR/USD manages to breach the first key support at 1.1304, it will probably continue to slide and test 1.1254. With this second key support broken, the movement to the downside will probably continue to 1.1192.
The mid-Pivot levels for today are as follows: M1 – 1.1223, M2 – 1.1279, M3 – 1.1335, M4 – 1.1391, M5 – 1.1447, M6 – 1.1503.
In weekly terms, the central pivot point is at 1.1366. The three key resistance levels are as follows: R1 – 1.1462, R2 – 1.1540, R3 – 1.1636. The three key support levels are: S1 – 1.1288, S2 – 1.1192, S3 – 1.1114.
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