By Jameel Ahmad, Chief Market Analyst at FXTM
Over the previous week, the EURUSD has recorded several fresh 2014 lows and the pair registered a further one yesterday. The EURUSD continued to be sold in anticipation of the latest German CPI data, but it was the US GDP announcement which triggered bearish movement.
The latest figures from the US Department of Commerce showed that the US economy expanded by an annualised 4% between April and June, far surpassing all expectations. The EURUSD fell as low as 1.3369 on the news, its lowest valuation since the 13th November 2013.
Where this pair moves from here will be largely dependent on how the markets react to today’s German employment report and EU CPI. Although on headline it would appear that the EU CPI is higher risk, it is worth keeping a close eye on the German employment report. Although it is widely expected that EU CPI remained at 0.5% for the third successive month in July, it does appear that the ECB are prepared to offer their recent stimulus measures time before considering the possibility of implementing QE. As long as EU CPI refrained from further decreasing last month, this might provide the EURUSD with some breathing space.
In reference to the German employment report, this is where investors looking for downside moves could find more opportunities. The German economy has been a casualty of the geopolitical conflict in Eastern Europe, with their recent IFO data representing a third consecutive decline. Additionally, the Bundesbank recently warned that there is a possibility that the German economy stagnated in Q2.
It is currently expected that the German employment sector contracted by 5,000 jobs in July and if this is confirmed, it will add additional pressure on the EURUSD valuation. Potential upcoming EURUSD support levels can be found located at 1.3365 and 1.3335.
For more information visit www.ForexTime.com
Disclaimer: The content in this article comprises personal opinions and ideas and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime Ltd, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice
ForexTime Ltd (FXTM) is a forex broker founded by Andrey Dashin in December 2012. FXTM provides access to the global currency market and offers trading in forex, precious metals, Share CFDs, ETF CFDs and CFDs on Commodity Futures. Trading is available via MT4 and MT5 platforms with spreads starting from just 0.5 on the Standard MT4 trading platform and from 0 on the ECN.MT4 and ECN.MT5 trading platforms. Bespoke trading support and services are provided based on each client’s needs and ambitions - from novices, to experienced traders and institutional investors. The company is registered as a Cyprus Investment Firm under registration number HE310361 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 185/12.
Get all the latest news and videos in your inbox. Register FREE