EUR/USD has posted slight losses in the Monday session after strong gains on Friday. Currently, the pair is trading at 1.1731, up 0.07% on the day. On the release front, it’s a quiet start to the week. Eurozone Consumer Confidence, which hasn’t posted gains since January, is expected to dip to -1 point. In the U.S, Existing Home Sales is forecast to climb to 5.46 million. On Tuesday, Germany and the eurozone will release service and manufacturing PMIs.
The dollar was broadly lower on Friday, after U.S President Trump made comments critical of Federal Reserve monetary policy. U.S presidents traditionally do not comment on moves by the Fed, but that did not prevent Trump from tweeting on Thursday that “tightening now hurts all that we have done”. On the weekend, Treasury Secretary Steven Mnuchin engaged in damage control, saying at the G-20 meeting that Trump was not interfering with the Fed policy of gradually raising rates. However, investors weren’t buying Mnuchin’s apologetics, and the U.S dollar continued to lose ground in Monday’s Asian session. There was more for investors to fret over, as Trump also attacked the EU and China for manipulating their currencies and keeping interest rates lower. This has raised concerns that the current global trade war could be followed by a currency war.
The euro posted marginal gains last week and continues to stay close to the 1.17 line. Traders should be prepared for some stronger movement in the Tuesday session, with the release of service and manufacturing PMIs for Germany and the eurozone. Both manufacturing PMIs have shown a troubling downward trend for the past six months – will this continue in June? Although the PMIs continue to show expansion in Germany and the eurozone, investors remain nervous that the escalating trade war is having a negative impact on the manufacturing sector. If the readings continue to head lower on Tuesday, the euro could lose ground.
Monday (July 23)
- 6:00 German Buba Monthly Report
- 10:00 Eurozone Consumer Confidence. Estimate -1
- 10:00 US Existing Home Sales. Estimate 5.46M
Tuesday (July 24)
- 3:00 French Flash Manufacturing PMI. Estimate 52.6
- 3:00 French Flash Services PMI. Estimate 55.7
- 3:30 German Flash Manufacturing PMI. Estimate 55.5
- 3:30 German Flash Services PMI. Estimate 54.6
- 4:00 Eurozone Flash Manufacturing PMI. Estimate 54.7
- 4:00 Eurozone Flash Services PMI. Estimate 55.0
*All release times are DST
*Key events are in bold
EUR/USD for Monday, July 23, 2018
EUR/USD for July 23 at 4:55 DST
Open: 1.1725 High: 1.1750 Low: 1.1687 Close: 1.1695
EUR/USD was flat in the Asian session and has edged lower in European trade
- 1.1637 is fluid. Currently, it is a weak support line
- 1.1728 is the next line of resistance
Further levels in both directions:
- Below: 1.1637, 1.1553, 1.1434 and 1.1312
- Above: 1.1728, 1829 and 1.1910
- Current range: 1.1637 to 1.1728
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