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EUR/USD Pulse Check 29 May 19

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The EUR/USD has been sliding lower since the start of the week.

EUR/USD Slides

Looking at the EUR/USD 60 minutes chart above, we note that the currency pair is sliding down towards the lower bollinger band.

The new trading week saw escalated tension between the US and China. Besides the Huawei issue, US President Trump said that the US is not ready to make a deal with China. Risk aversion is likely flooding into the market. Equities around the world are mostly red.

The yellow channel plotted in the chart indicates that the downside momentum can still be valid. This is a situation that we have been mentioning for some time now. Unless there are clear indications that the bearish run is over, we cannot assume temporary consolidation as a change in trend. The failure to hold 1.12 is another indication of a bearish undertone. Do be mindful that price action in shorter time frames are often sentimental in nature.

European Parliamentary Election Mixed and US Consumer Sentiment Delights

The general talk of the town for the elections appears to be fragmentation. The euro currency appears to be having a mixed reaction too.

While this happens, across the Atlantic we are seeing another better than expected economic release for the US. The US CB Consumer Confidence was reported to be 134.1 instead of 130.1. Consumer surveys are influential as the sentiment of consumers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well and hence consumers are confident. This likely leads to increased retail sales. A cautious sentiment on the other hand may see consumers spend less in view of a perceived upcoming economic crisis. This positive release likely contributed to positive sentiment for the US dollar.

Still to Come

Many important economic events are still to come and it will be even more critical now for us to assess each with the understanding of whether risk appetite has increased or decreased.

EUR German Buba President Weidmann Speech
Speeches may contain a question and answer segment that at times go into unscripted territory and result in unexpected developments and volatility.

US Preliminary Gross Domestic Product
Gross domestic product is a measure of the monetary market value of all the goods and services produced. It is an overall measure of economic activity and health.

US FOMC Member Clarida Speech
Speeches may contain a question and answer segment that at times go into unscripted territory and result in unexpected developments and volatility.

EUR German Preliminary CPI
Consumer Price Index is important because the price of consumer goods is a significant component of inflation. If inflation is high, a central bank may increase interest rate to mitigate the situation.

US Core PCE Price Index
While the Personal Consumption Expenditures index is similar to Consumer Price Index, it focuses on individuals. It is a component of inflation and if inflation is high, a central bank may increase interest rate to mitigate the situation.

US Personal Spending
While Personal Spending is similar to Retail Sales, it focuses on consumers. It is a fundamental component of the economy because as consumers spend, it translates to revenue and flows up stream as salaries, wholesales purchase, production orders and so on.

US Chicago PMI
The Purchasing Managers’ Index is a survey of purchasing managers and is important as the sentiment of purchasing managers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well while a cautious sentiment may see less business activities due to prudence.

US Revised UoM Consumer Sentiment
Consumer surveys are influential as the sentiment of consumers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well and hence consumers are confident. This likely leads to increased retail sales. A cautious sentiment on the other hand may see consumers spend less in view of a perceived upcoming economic crisis.

US FOMC Member Williams Speech
Speeches may contain a question and answer segment that at times go into unscripted territory and result in unexpected developments and volatility.

There are many more events and hence it is important to follow an economic calendar. By doing so, you can reduce the possibility of an unexpected development affecting your trading plan. Members can log in to their dashboards for an economic calendar. The latest premium analysis and our popular Price Action Bias Signals are now available too.

Traders should always practice proper money management and seek to understand the underlying tones for the market.

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