Forex traders will get key CPI data out of France, Italy, and Germany today. Economists expect inflationary pressure to remain absent, despite the ECB’s quantitative easing program. The EURUSD has retreated from its most recent peak and is now awaiting more data. The Spanish unemployment change showed continued sluggishness, German data will follow later in today’s session. What impact will this have on price action? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Today’s ISM Manufacturing Index will be crucial for the US Dollar. It has confirmed a recession in the manufacturing sector and remains near multi-year lows. The EURUSD is under selling pressure but stabilized after reaching its horizontal support level. Geopolitical developments point towards an increase in tension between the US and Iran. Forex traders are now waiting for fresh US economic data, how will this currency pair react? 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:
- French CPI: The Preliminary French CPI for December increased by 1.0% monthly and by 1.4% annualized. Forex traders can compare this to the French CPI for November, which increased by 0.1% monthly and by 1.0% annualized. The French Harmonized CPI for December increased by 0.5% monthly and by 1.6% annualized. Forex traders can compare this to the French Harmonized CPI for November, which increased by 0.1% monthly and by 1.2% annualized.
- Spanish Unemployment Change: The Spanish Unemployment Change for November was reported at -34.6K. Forex traders can compare this to the Spanish Unemployment Change for October, which was reported at 20.5K.
- German Unemployment Change and German Unemployment Rate: The German Unemployment Change for December is predicted at 3.5K and the German Unemployment Rate at 5.0%. Forex traders can compare this to the German Unemployment Change for November, which was reported at -16.0K and to the German Unemployment Rate, which was reported at 5.0%.
- Eurozone M3 Money Supply: Eurozone M3 Money Supply for November is predicted to increase by 5.7% annualized. Forex traders can compare this to Eurozone M3 Money Supply for October, which increased by 5.6% annualized. Eurozone Private Sector Loans for November are predicted to increase by 3.5% annualized. Forex traders can compare this to Eurozone Private Sector Loans for October, which increased by 3.8% annualized.
- Italian CPI: The Preliminary Italian CPI for December is predicted flat at 0.0% monthly and to increase by 0.3% annualized. Forex traders can compare this to the Italian CPI for November, which decreased by 0.2% monthly, and which increased by 0.2% annualized. The Preliminary Italian Harmonized CPI for December is predicted to decrease by 0.1% monthly and to increase by 0.5% annualized. Forex traders can compare this to the Italian Harmonized CPI for November, which decreased by 0.3% monthly and which increased by 0.2% annualized.
- Preliminary German CPI: The Preliminary German CPI for December is predicted to increase by 0.4% monthly and by 1.4% annualized. Forex traders can compare this to the German CPI for November, which decreased by 0.8% monthly and which increase by 1.1% annualized. The EU Harmonized German CPI for December is predicted to increase by 0.5% monthly and by 1.4% annualized. Forex traders can compare this to the EU Harmonized German CPI for November, which decreased by 0.8% monthly and which increased by 1.2% annualized.
Here are the key factors to keep in mind today for US Dollar trades:
- US Construction Spending: US Construction Spending for November is predicted to increase by 0.3% monthly. Forex traders can compare this to US Construction Spending for October, which decreased by 0.8% monthly.
- US ISM Manufacturing Index: The US ISM Manufacturing Index for December is predicted at 49.0. Forex traders can compare this to the US ISM Manufacturing Index for November, which was reported at 48.1. ISM Prices Paid for December are predicted at 47.5. Forex traders can compare this to ISM Prices Paid for November, which were reported at 46.7.
Should price action for the EURUSD remain inside the or breakout above the 1.1125 to 1.1200 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.1150
- Take Profit Zone: 1.1350 – 1.1410
- Stop Loss Level: 1.1100
Should price action for the EURUSD breakdown below 1.1125 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.1100
- Take Profit Zone: 1.0905 – 1.0975
- Stop Loss Level: 1.1150
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