The German GDP for the fourth quarter came in lower than expected, followed by a minor disappointment in the Eurozone GDP. Eurozone employment increased steadily and the trade surplus rose. This helped the EURUSD regain stability inside of a strong horizontal support area. Forex traders now await US economic data, how will it impact price action? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Retail sales data out of the US is expected to move the US Dollar today. Economists predict an increase in all sub-categories. Industrial production is expected to contract again, with a small increase in manufacturing production. Finishing the trading week will be consumer confidence data for February. Will bulls get economic data to pressure the EURUSD into a breakout or will bears force more downside? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
Here are the key factors to keep in mind today for Euro trades:
- German GDP: The Preliminary German GDP for the fourth quarter was reported flat at 0.0% quarterly and increased by 0.3% annualized. Economists predicted an increase of 0.1% quarterly and of 0.2% annualized. Forex traders can compare this to the German GDP report for the third quarter, which increased by 0.2% quarterly and by 1.1% annualized.
- German Wholesale Price Index: The German Wholesale Price Index for January increased by 0.3% monthly and 1.0% annualized. Forex traders can compare this to the German Wholesale Price Index for December, which was reported flat at 0.0% monthly, and which decreased by 1.3% annualized.
- Preliminary Spanish CPI: The Preliminary Spanish CPI for January decreased by 1.0% monthly, and increased by 1.1% annualized. Economists predicted a decrease of 1.0% and an increase of 1.1%. Forex traders can compare this to the Spanish CPI for December, which decreased by 0.1% monthly, and which increased by 0.8% annualized. The Preliminary Spanish Harmonized Spanish CPI for January decreased by 1.4% monthly and increased by 1.1% annualized. Economists predicted a decrease of 1.4% and an increase of 1.1%. Forex traders can compare this to the Spanish Harmonized Spanish CPI for December, which decreased by 0.1% monthly, and which increased by 1.1% annualized.
- Eurozone GDP: The preliminary Eurozone GDP for the fourth-quarter increased by 0.1% quarterly and by 0.9% annualized. Economists predicted an increase of 0.1% quarterly and 1.0% annualized. Forex traders can compare this to the Eurozone GDP for the third-quarter, which increased by 0.1% quarterly and by 1.0% annualized.
- Eurozone Employment: Eurozone Employment for the fourth-quarter increased by 0.3% quarterly and by 1.0% annualized. Forex traders can compare this to Eurozone Employment for the third-quarter, which increased by 0.1% quarterly and by 1.0% annualized.
- Eurozone Trade Balance: The Eurozone Trade Balance for December was reported at €22.2B. Economists predicted a figure of €19.0B. Forex traders can compare this to the Eurozone Trade Balance for November, which was reported at €19.1B.
Here are the key factors to keep in mind today for US Dollar trades:
- US Advanced Retail Sales: US Advanced Retail Sales for January are predicted to increase by 0.3% monthly and Retail Sales Less Autos are predicted to increase by 0.3% monthly. Forex traders can compare this to US Advanced Retail Sales for December, which increased by 0.3% monthly and to Retail Sales Less Autos, which increased by 0.7% monthly. Retail Sales Less Autos and Gas for January are predicted to increase by 0.3% monthly and Retail Sales Control Group are predicted to increase by 0.3% monthly. Forex traders can compare this to Retail Sales Less Autos and Gas for December, which increased by 0.5% monthly and to Retail Sales Control Group, which increased by 0.5% monthly.
- US Import and Export Price Index: The US Import Price Index for January is predicted to decrease by 0.2% monthly and to increase by 0.1% annualized. Forex traders can compare this to the US Import Price Index for December, which increased by 0.3% monthly and by 0.5% annualized. The US Import Price Index excluding Petroleum for January is predicted to decrease by 0.1% monthly. Forex traders can compare this to the US Import Price Index excluding Petroleum for December, which increased by 0.2% monthly. The US Export Price Index for January is predicted to decrease by 0.1% monthly and to decrease by 0.5% annualized. Forex traders can compare this to the US Export Price Index for December, which decreased by 0.2% monthly and by 0.7% annualized.
- US Industrial Production and Manufacturing Production: US Industrial Production for January is predicted to decrease by 0.2% monthly and Manufacturing Production is predicted flat at 0.0% monthly. Forex traders can compare this to US Industrial Production for December, which decreased by 0.3% monthly and to Manufacturing Production which increased by 0.2% monthly. Capacity Utilization for January is predicted at 76.8%. Forex traders can compare this to Capacity Utilization for December, which was reported at 77.0%.
- US Michigan Consumer Sentiment: Preliminary US Michigan Consumer Sentiment for February is predicted at 99.2. Forex traders can compare this to US Michigan Consumer Confidence for January, which was reported at 99.8. Preliminary Current Conditions for February are expected at 115.0 and Preliminary Expectations are predicted at 90.0. Forex traders can compare this to Current Conditions for January, which were reported at 114.4 and to Expectations, which were reported at 90.5.
- US Business Inventories: US Business Inventories for December are predicted to increase by 0.1% monthly. Forex traders can compare this to US Business Inventories for November, which decreased by 0.2% monthly.
Should price action for the EURUSD remain inside the or breakout above the 1.0825 to 1.0865 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.0845
- Take Profit Zone: 1.0990 – 1.1030
- Stop Loss Level: 1.0800
Should price action for the EURUSD breakdown below 1.0825 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.1035
- Take Profit Zone: 1.0905 – 1.0975
- Stop Loss Level: 1.1070
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