Fundamental indicators of the German economy will be the main drivers for the single European currency today. The 2nd assessment of GDP indicators, the PMI for May from the Markit agency, as well as IFO indicators on the German business climate will determine investor sentiment. In addition to German statistics, you should pay attention to the minutes of the ECB meeting on monetary policy, the tone of which may also affect the euro.
According to forecasts, the business activity index (PMI) will show an increase from 44.4 to 44.8. Since this indicator indicates well-being in the industrial sector of Germany, if the real figures coincide with the predicted ones, we can expect a positive impact on the single European currency.
But it is not so simple with the index of business activity in the services sector of the main economy of the European Union. Analysts give figures of 55.5, which is less than previous data of 55.7. It is quite possible that the two above mentioned releases can level the impact of each other. Given the fact that no changes are expected in the figures of the German business climate index (99.2), this scenario is quite possible.
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As for the US dollar, its behavior today will be determined by releases based on preliminary data on business activity in the services sector, numbers on applications for unemployment benefits and data on sales of new homes.
The market focus is likely to be focused on the business activity index in the services sector, where the expected figures are 53.2, which is better than the previous value of 53.0, which means they can play to the advantage of the American currency.
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The support to the American currency also gives an unexpected data on the increase in US oil reserves over the past week, as well as on the growth of its production in the country. This pushed world prices for “black gold” to decline - this morning the cost of July futures for Brent blend fell by 0.69% to $ 70.5 per barrel, and the price of July futures for WTI was down 0.6% up to 61.05 dollars.
Forex trading recommendations:
EURUSD: Buy. Entry point – 1, 1146. Take Profit – 1, 1160. Stop Loss – 1, 1123.
AUDUSD: Buy. Entry point – 0, 6872. Take Profit – 0, 6885. Stop Loss – 0, 6849.
NZDUSD: Sell. Entry point – 0, 6492. Take Profit – 0, 6479. Stop Loss – 0, 6514.
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