The EUR/USD is currently showing pivotal price action around 1.13.
EUR/USD Technical Analysis
Looking at the EUR/USD 60 minutes chart above, we note that the currency pair is now heading towards the lower end of it’s recent range. As the optimism from the G20 gives way to business as usual, the market will now seek to determine the next course of direction.
The yellow lines are possible regions of support and resistance. Do be mindful that price action in shorter time frames are often sentimental in nature. A decisive breach of the lower range will open up 1.12 while a bullish return will seek to pivot towards the upside of 1.13.
US Economic Data Mixed
While the ISM Manufacturing PMI came in better than expected, a look at the bigger picture will yield the fact that it is the lowest ever in recent years. As 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 low may come across as an indication of an economic challenge.
US Non Farm Payroll Ahead
The ADP Non-Farm Employment Change came in weaker than expected. ADP’s statistics is based on the payroll data of approximately 400,000 U.S. business clients. Therefore it is viewed by many as a possible early indication of the US Non-Farm Payroll result. Employment is a fundamental component of the economy as it leads to consumer spending and hence retail sales. A low unemployment rate is an indicator of a healthy functioning economy. Therefore the US Non-Farm Payroll this Friday will be closely monitored.
The Next ECB President
It is reported that IMF’s Christine Lagarde will likely replace Mario Draghi. Speculations are that she will probably continue the general direction of the current leadership which is a loose monetary policy to sustain the euro’s economy. If indeed, with the quantitative easing pressure on the currency, we may see a period of weak euro currency outlook.
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. The US is on holiday for the 4th of July and hence do be mindful of possible low liquidity conditions.
USA ISM Non-Manufacturing PMI
PMI or 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.
USA Average Hourly Earnings
Consumer earnings is important due to it’s upstream impact. With more earnings comes possible increased consumer spending. This translates to revenues, leading to employment and business expansion.
USA Non-Farm Employment Change
USA Unemployment Rate
Employment is a fundamental component of the economy as it leads to consumer spending and hence retail sales. A low unemployment rate is an indicator of a healthy functioning economy.
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. Traders should always practice proper money management and seek to understand the underlying tones for the market.
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