Euro: USD/EUR (EUR=X) Economic Data, Economic Uncertainty
On the Macro
It’s a quieter week ahead on the economic calendar, with 51 stats to monitor in the week ending 28th March. In the week prior, 58 stats had been in focus.
For the Dollar:
It’s a busy week ahead for the greenback, with U.S data making up the lion’s share of stats for the week.
Last week we saw the Dollar on the bounce, supporting those that believe it’s dangerous to bet against the Dollar.
This week, we’ll get a sense of how true that view stands.
Prelim private sector PMI numbers for March are due out on Tuesday. Looking at the estimates, economists have lowered the expectation bar, but could still be overly optimistic.
With the U.S already facing the wrath of the coronavirus, one would expect a marked contraction across both sectors.
On Wednesday, durable goods orders for February are due out that will also set off some early warning signals. Asian markets were already under the cosh, which should be reflected in the numbers.
On Thursday, finalized 4th quarter GDP numbers should be brushed aside, as should trade data. We would expect the weekly jobless claims figures to have a material influence, however…
Look out for any move back towards 300k levels. The last time initial jobless claims breached 300k was back in March 2015. At that time, the unemployment rate had stood at 5.4%. Economists have forecast a jump to 775K, which would be unprecedented. Once again, however, this may also be overly optimistic when considering the shutdowns across the country. The more pessimistic have forecasted claims of as much as 2m and possibly more.
The current historical record sits at 695k, which was hit back in the 1980s…
Consumer spending remains the key driver, irrespective of Trump’s desire to bring industrial production home. Confidence, wage growth, and labor market conditions will factor in the all-important services sector.
In the week, a slump in service sector activity and jump in the weekly initial jobless claims would certainly spook the markets… Service sector activity is expected to slump, which will lead to further job cuts and a further contraction in the sector.
Other stats in the week including housing sector data, finalized GDP numbers, and February inflation and personal spending figures. Expect the numbers to be brushed aside.
Finalized consumer sentiment figures for March will draw some attention at the end of the week, however.
Outside of the numbers, fiscal support is expected this week, which could ease some of the stress.
The Dollar Spot Index ended the week up 4.12% to 102.817.
For the EUR:
It’s a relatively busy week ahead on the economic data front.
The Eurozone’s flash consumer confidence numbers for March get things going on Monday.
On Tuesday, the focus will then shift to Prelim March private sector PMIs for France, Germany, and the Eurozone.
While the focus will have previously been on Germany’s manufacturing and Eurozone Composite, all the numbers will matter.
It will be the 1st set private sector PMIs for March, which will give the markets an idea of what impact the virus will have on the economy. Consumer confidence is certainly going to set the tone ahead of the PMI numbers.
Forecasts are particularly gloomy, which is not surprising when considering the shutdown across the bloc.
In the 2nd half of the week, Germany’s March business confidence and April consumer confidence figures will be in focus.
Again, we’re looking at March and April figures that will have a material influence on the EUR and risk appetite…
Don’t expect any positive numbers, with an EU shutdown certainly a negative for the private sector.
From the ECB, the Economic Bulletin on Thursday will give the markets update on the ECB’s views on the economy. While central banks will not want to send shockwaves, it will be hard to put a positive spin on things.
The EUR/USD ended the week down by 3.77% to $1.0688.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.10.
The projected upper bound is: 1.09.
The projected lower bound is: 1.05.
The projected closing price is: 1.07.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 21 white candles and 28 black candles for a net of 7 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 8.6982. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 33.05. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 9 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -141.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 8 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 4 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed down -0.000 at 1.069. Volume was 32% below average (neutral) and Bollinger Bands were 190% wider than normal.
Open High Low Close Volume___
1.069 1.077 1.064 1.069 50,539
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.10 1.10 1.11
Volatility: 16 12 8
Volume: 133,861 89,087 75,608
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX EUR= is currently 3.6% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of EUR= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 1 periods.