While forex traders remain focused on developments in the US-China trade war as well as the Yuan, they will receive a heavy dose of economic data out of the Eurozone. CPI readings out of Spain and Germany will be closely watched by the ECB, but Eurozone confidence data is expected to move the Euro. Economists anticipate a further slowdown of all sub-components with the key Business Climate Indicator seen sliding further into negative territory. Will the EURUSD be able to advance off of strong support levels despite the expected negative tone in economic data? Subscribe to the PaxForex Daily Fundamental Analysis and where you grow your balance trade by trade!
The updated reading on second-quarter US GDP is expected to see a minor downward revision, but forex traders are likely to discount it as economic data released during the third-quarter so far has been weaker than expected. As new tariffs are set to kick in on Sunday and the global economy slowing down, the US Federal Reserve will be closely watched. Markets expected an interest rate cut in September, with some holding out for a 50 basis point cut surprise. How will this impact the US Dollar? Will the labor market hold up and can the consumer borrow more to spend? Price action in the EURUSD is grinding at support, is a short-covering rally on the horizon? Today’s fundamental analysis will take a look in both directions of the world’s most liquid currency pair.
Here are the key factors to keep in mind today for Euro trades:
- French Consumer Spending: French Consumer Spending for July is predicted to increase by 0.3% monthly. Forex traders can compare this to French Consumer Spending for June which decreased by 0.1% monthly.
- French GDP: The Final French GDP for the second-quarter is predicted to increase by 0.2% quarterly and by 1.3% annualized. Forex traders can compare this to the previous French GDP for the second-quarter which increased by 0.2% quarterly and by 1.3% annualized.
- Preliminary Spanish CPI: The Preliminary Spanish CPI for August is predicted to increase by 0.4% annualized and the Spanish EU Harmonized CPI is predicted to increase by 0.6% annualized. Forex traders can compare this to the Spanish CPI for July which increased by 0.5% annualized and to the Spanish EU Harmonized CPI which increased by 0.6% annualized.
- German Unemployment Change and German Unemployment Rate: The German Unemployment Change for August is predicted at 4K and the German Unemployment Rate at 5.0%. Forex traders can compare this to the German Unemployment Change for July which was reported at 1K and to the German Unemployment Rate which was reported at 5.0%.
- Eurozone Confidence Data: Eurozone Economic Confidence for August is predicted at 102.3. Forex traders can compare this to Eurozone Economic Confidence for July which was reported at 102.7. Eurozone Industrial Confidence for August is predicted at -7.5. Forex traders can compare this to Eurozone Industrial Confidence for July which was reported at -7.4. Eurozone Services Confidence for August is predicted at 10.5. Forex traders can compare this to Eurozone Services Confidence for July which was reported at 10.6. Final Eurozone Consumer Confidence for August is predicted at -7.1. Forex traders can compare this to the previous Eurozone Consumer Confidence for August which was reported at -7.1. The Eurozone Business Climate Indicator for August is predicted at -0.15. Forex traders can compare this to Eurozone Business Climate Indicator for July which was reported at -0.12.
- Preliminary German CPI: The Preliminary German CPI for August is predicted to decrease by 0.1% monthly and to increase by 1.5% annualized. Forex traders can compare this to the German CPI for July which increased by 0.5% monthly and by 1.7% annualized. The EU Harmonized German CPI for August is predicted to increase by 0.5% monthly and by 1.2% annualized. Forex traders can compare this to the EU Harmonized German CPI for July which increased by 0.4% monthly and by 1.1% annualized.
Here are the key factors to keep in mind today for US Dollar trades:
- US GDP: The Advanced US GDP for the second-quarter is predicted to increase by 2.0% annualized. Forex traders can compare this to the previous second-quarter GDP which increased by 2.1% annualized. Personal Consumption for the second-quarter is predicted to increase by 4.3% annualized. Forex traders can compare this to previous second-quarter Personal Consumption which increased by 4.3% annualized. The GDP Price Index for the second-quarter is predicted to increase by 2.4% annualized. Forex traders can compare this to the previous second-quarter GDP Price Index which increased by 2.4% annualized. The Core PCE for the second-quarter is predicted to increase by 1.8% annualized. Forex traders can compare this to the previous second-quarter Core PCE which increased by 1.8% annualized.
- US Advanced Goods Trade Balance: The US Advanced Goods Trade Balance for July is predicted at -$74.6B. Forex traders can compare this to the US Advanced Goods Trade Balance for June which was reported at -$74.2B.
- US Inventories: US Preliminary Wholesale Inventories for July are predicted to increase by 0.2% monthly and US Preliminary Retail Inventories are predicted to increase by 0.2% monthly. Forex traders can compare this to US Wholesale Inventories for June which were reported flat at 0.0% monthly and to US Retail Inventories which decreased by 0.1% monthly.
- US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of August 24th are predicted at 215K and US Continuing Claims for the week of August 17th are predicted at 1,680K. Forex traders can compare this to US Initial Jobless Claims for the week of August 17th which were reported at 209K and to US Continuing Claims for the week of August 10th which were reported at 1,674K.
- US Pending Home Sales: US Pending Home Sales for July are predicted flat at 0.0% monthly and to increase by 1.8% annualized. Forex traders can compare this to US Pending Home Sales for June which increased by 2.8% monthly and which decreased by 0.6% annualized.
Should price action for the EURUSD remain inside the or breakout above the 1.1050 to 1.1115 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.1080
- Take Profit Zone: 1.1250 – 1.1320
- Stop Loss Level: 1.1025
Should price action for the EURUSD breakdown below 1.1050 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.0990
- Take Profit Zone: 1.0775 – 1.0820
- Stop Loss Level: 1.1025
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