EUR/USD has plenty of risk events ahead

By FXstreet.com | July 28, 2014 AAA

FXStreet (Guatemala) - EUR/USD is trading at 1.3438, up 0.06% on the day, having posted a daily high at 1.3443 and low at 1.3427.

Quiet today, and looking back to last week, we note that it was a quiet ending although one that came with a mixed bag of data for the Eurozone. Jonathan Pryor, Corporate Treasury Analyst at Investec explained " German IfO numbers, which are a measure of the business climate, fell for the third consecutive month perhaps owing to increasing geopolitical tensions, whilst France posted higher unemployment figures." We had some talk over the weekend that Ireland could get its self on track in terms of paying back the more expensive loans to the IMF earlier and at the same time, Portugal’s credit rating was put up to Ba2 from Ba1.

Week ahead for EUR/USD

For the calendar this week, we have some German numbers but the key Euro area data is likely to be CPI that is expected to remain at 0.5% y/y. Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ explained "The main focus in Europe in the week ahead will be the likely imposition of further sanctions on Russia”. He also noted, "The payrolls report is expected to reveal that employment growth continues to remain robust building the case for the Fed to begin shifting away from its current exceptionally loose monetary policy stance… fastest average rate of non-farm employment growth since April 2006 and clearly highlights that the labour market is strengthening."

EUR/USD short term technicals are bearish

Eric Theoret, Currency Strategist at Scotiabank explained that "EUR/USD short-term technical are bearish. “Both trend and momentum indicators are suggestive of further downside, however we note that the RSI has entered oversold territory between 20 and 30. Key downside levels include 1.3400 and the November 2013 low at 1.3296."

EUR/USD short term hourly levels

Current price is 1.3438 (Hourly 20 EMA), with resistance ahead at 1.3443 (Daily High), 1.3457 (Hourly 100 SMA) and 1.3464 (Daily Classic R1). Next support to the downside can be found at 1.3427 (Daily Low).

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