Expectations were high last week as OlympTrade broker and analysts rated for an outcome higher than forecast for the U.S job growth before the announcement. If the performance was higher than expected, analysts believed the FOMC will be confident in announcing the taper date of its assets during the November meeting.
EURO and US News
ZEW Economic Sentiment
They carried a survey out among some German Institutional investors and some analysts to rate the economic outlook of the European zones and they are about 270. A data that is above 0.0 shows optimism for the Euro while a below indicates pessimism. ZEW focus on the German economy.
The outcome can be an early signal of the future economic activity in the Eurozone.
The forecast is 27.9 while the previous is 31.1
Core Retail Sales m/m
Automobiles sales are very volatile and distorting in the underline trend of the market. The automobile accounts for about 20% of retail sales. However, the total value of sales at the retail levels excludes automobiles during the monthly reports.
The previous data on home resales was 1.8% while the forecast is 0.5%.
Ahead of the US consumer price data, analysts say it could provide clues when the Federal reserves will taper stimulus program and raise interest rates as soon as possible. Online brokers and some strategists are positioning themselves ahead of the CPI news. We can see that the greenback is pulling back ahead of the news.
EURUSD Technical Analysis
Monthly Chart Objective: Down Trend Buildups
Monthly Resistance 1.2300, 1.18500.
Monthly Support levels 1.15000, 1.15500.
Online brokers in short position are seeing a possibility of a breakout from the support levels of 1.15500 as the previous candle had a bearish momentum which is still pushing the price down in the new month despite the disappointment of the US NFP that was released last week.
The forex market will experience another bearish fall if the Bears can close below the support levels of 1.15000. The support level may push the price up if the Bulls can resist the Bears’ pressures around the zones.
Weekly Chart Down Trend
Weekly Resistance levels 1.16650, 1.19150
Weekly Support levels 1.15230, 1.16720
The weekly candle of EUUSD pair of last week closed in as Doji state because of the NFP outcome that didn’t favor online brokers and other forex participants. This week’s economic calendar report will also give clues about the Federal Reserves’ sentiment when the CPI and retail sales reports are released.
The US economy has made significant progress in the recent months without paying attention to the job growth data since the pandemic. We expect the Economic activity concerning the US jobs growth per month to hit 435K and above before it reaches the full employment stage it experienced pre-pandemic.
Daily: Breakdown of Support into downtrend
D1 Resistance 1.19150, 1.17500
D1 Support 1.14500, 1.13000, 1.15460
Bearish momentum continues for the EURUSD following the poor result of the NFP that was released on Friday last week. The bearish momentum is pushing the price lower towards the 1.14500 level. If the price ranges for long around the current zones of 1.15460, we may see the Bulls push the price up that level. The dollar is still having a stronger edge against other majors as we see the price growing in strength.
The US dollar index has shown strength against some majors as it rose by 0.54% from 94.00 to 94.513 at the time of the report.
Conclusion and Weekly Price Objectives
Analysts and online brokers are concerned about the stagflation crisis in the economy, and all eyes will be on the CPI and retail sales data during the week.
The Federal Reserve is likely going to reduce the monthly bond purchases in November and later they plan to increase the Interest rate from the following year.
According to some analysts like JP Morgan, they see the stagflation fears as an overblown topic. He sees the increase in energy prices because of both a demand and supply shock. Some banks in wall street see also state in their own opinion that stagflation is not a major concern and it won’t act as a barrier to the growth of equities this year.
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