Yesterday the euro grew and stock market fell amid weak data on Richmond Fed Manufacturing Index in July: -11 vs. expectations for 7 and 8 in June. However, the euro did not drop amid weak US data. The growth of the euro on small volumes, the number of buys has not increased, major investors are waiting for the signals which are more important and they are not sure that signals will be in favour of the euro. There are only two important signals; the decision to increase the threshold of the government debt and QE3 trimming. The next event is the decision about the national debt which will be taken in a week. Before it, weak data on sales on the housing market, Durable goods orders, and GDP in the second quarter (on July 31, forecast 1.4% vs. 1.8%). It is clear that major investors are not going to risk with the euro until that time. Figuratively, it could be said the market is thin and a surprise in form of the fail of the euro and other counter-dollar currencies may be anticipated. One should wait till there are enough buyers.
Today a lot of data is published, it is expected to be positive. At 11:00 UTC+4 Manufacturing PMI in France in July, forecast 48.9 vs. 48.4 in June and Services PMI, 47.7 vs. 47.2 in the previous month. At 11:30 UTC+4 Manufacturing PMI in Germany; it is forecast to be 49.3 vs. 48.6; Services PMI, 50.9 vs. 50.4 in June. The data may not be in line with the forecasts. Last week ZEW Economic Sentiment in Germany was revealed; it was considerably weak: 36.3 vs. forecast for 39.8.
At 12:00 UTC+4 data on PMI in the Eurozone is issued; PMI Manufacturing, 49.1 vs. 48.8; PMI Services 48.9 vs. 48.3.
At 17:00 UTC+4 US PMI Manufacturing in July is expected; forecast 52.5 vs. 51.9 in June. At 18:00 UTC+4 US New Home Sales in June, forecast 482K vs. 476K in May. On Monday, data on US Existing Home Sales was weaker that expectations and previous reading. However, if we assume that amid the rise of the data in the US real sector of economy, which was published two weeks ago, the US citizens reoriented to new homes (as it often happens), then the data may be close to the expectations.
Thus, data on the Eurozone may be worse than expected and US data may be close to forecasts. In such conditions strength of the US dollar is probable.
From the technical point of view, after consolidation under the blue trend line on the H4, we expect the price near the first target 1.3143, the second target is 1.3102, the high of June 28.
The material has been provided by InstaForex Company – www.instaforex.com
Yesterday the euro grew and stock market fell amid weak data on Richmond Fed Manufacturing Index in July: -11 vs. expectations for 7 and 8 in June. However, the euro did not drop amid weak US data. The growth of the euro on small volumes, the number of buys has not increased, major investors are waiting for the signals which are more important and they are not sure that signals will be in favour of the euro. There are only two important signals; the decision to increase the threshold of the government debt and QE3 trimming. The next event is the decision about the national debt which will be taken in a week. Before it, weak data on sales on the housing market, Durable goods orders, and GDP in the second quarter (on July 31, forecast 1.4% vs. 1.8%). It is clear that major investors are not going to risk with the euro until that time. Figuratively, it could be said the market is thin and a surprise in form of the fail of the euro and other counter-dollar currencies may be anticipated. One should wait till there are enough buyers.
Today a lot of data is published, it is expected to be positive. At 11:00 UTC+4 Manufacturing PMI in France in July, forecast 48.9 vs. 48.4 in June and Services PMI, 47.7 vs. 47.2 in the previous month. At 11:30 UTC+4 Manufacturing PMI in Germany; it is forecast to be 49.3 vs. 48.6; Services PMI, 50.9 vs. 50.4 in June. The data may not be in line with the forecasts. Last week ZEW Economic Sentiment in Germany was revealed; it was considerably weak: 36.3 vs. forecast for 39.8.
At 12:00 UTC+4 data on PMI in the Eurozone is issued; PMI Manufacturing, 49.1 vs. 48.8; PMI Services 48.9 vs. 48.3.
At 17:00 UTC+4 US PMI Manufacturing in July is expected; forecast 52.5 vs. 51.9 in June. At 18:00 UTC+4 US New Home Sales in June, forecast 482K vs. 476K in May. On Monday, data on US Existing Home Sales was weaker that expectations and previous reading. However, if we assume that amid the rise of the data in the US real sector of economy, which was published two weeks ago, the US citizens reoriented to new homes (as it often happens), then the data may be close to the expectations.
Thus, data on the Eurozone may be worse than expected and US data may be close to forecasts. In such conditions strength of the US dollar is probable.
From the technical point of view, after consolidation under the blue trend line on the H4, we expect the price near the first target 1.3143, the second target is 1.3102, the high of June 28.
The material has been provided by InstaForex Company – www.instaforex.com
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