Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Preliminary French Markit Manufacturing PMI for July is predicted at 50.8, the Preliminary French Markit Services PMI at 52.7, and the Preliminary French Markit Composite PMI at 51.8. Forex traders can compare this to the French Markit Manufacturing PMI for June, reported at 51.4, the French Markit Services PMI at 53.9, and the French Markit Composite PMI at 52.5.
The Preliminary German Markit Manufacturing PMI for July is predicted at 50.6, the Preliminary German Markit Services PMI at 51.2, and the Preliminary German Markit Composite PMI at 50.1. Forex traders can compare this to the German Markit Manufacturing PMI for June, reported at 52.0, the German Markit Services PMI at 52.4, and the German Markit Composite PMI at 51.3.
The Preliminary Eurozone Markit Manufacturing PMI for July is predicted at 51.0, the Preliminary Eurozone Markit Services PMI at 52.0, and the Preliminary Eurozone Markit Composite PMI at 51.0. Forex traders can compare this to the Eurozone Markit Manufacturing PMI for June, reported at 52.1, the Eurozone Markit Services PMI at 53.0, and the Eurozone Markit Composite PMI at 52.0.
The European Central Bank followed through on a more hawkish 50 basis point interest rate increase, while the South African central bank also delivered a more aggressive 75 basis point hike. The ECB ended eleven years of monetary mistakes that added to today’s inflationary scenario, together with other central banks. Borrowing costs continue to increase, and the economic picture sours, led by the US, which is in a recession, denied by the US Federal Reserve and policymakers. Data continues to show a faster contraction than feared, and next week’s second quarter GDP data could officially confirm it.
The Preliminary US Markit Manufacturing PMI for July is predicted at 52.0, and the Preliminary US Markit Services PMI at 52.6. Forex traders can compare this to the US Markit Manufacturing PMI for June, reported at 52.7, and to the US Markit Services PMI, reported at 52.7.
The forecast for the EUR/USD remains bullish after this currency pair briefly pierced parity before mounting a snap-back rally. Adding to bearish momentum is the descending Ichimoku Kinko Hyo Cloud, but short-term downside pressure faded, as indicated by the flat Tenkan-sen and Kijun-sen, which engulf price action. The CCI accelerated from extreme oversold territory following a higher low and a positive divergence. It has now eclipsed the zero level and has plenty of upside potential. Can bulls continue to dominate price action and pressure the EUR/USD into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the EUR/USD remain inside the or breakout above the 1.0115 to 1.0280 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.0180
- Take Profit Zone: 1.0640 – 1.0765
- Stop Loss Level: 0.9925
Should price action for the EUR/USD breakdown below 1.0115, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9925
- Take Profit Zone: 0.9750 – 0.9850
- Stop Loss Level: 1.0115
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