EURUSD Fundamental Analysis – July 12th 2019

Forex traders received more economic data this morning out of Asia which confirms that the economic slowdown is steeper than expected. The second-quarter GDP out of Singapore slumped by 3.4% quarterly, almost reversing the 3.8% quarterly gain reported in the first-quarter. Eurozone industrial production will now be in focus as economists anticipate a small monthly increase for May, partially reversing the decrease reported in April. Will data come in stronger than expected and extend the recovery in the EURUSD or will it follow data out of Singapore and disappoint? Today’s fundamental analysis will highlight the risks to the upside as well as to the downside.

Here are the key factors to keep in mind today for Euro trades:

• German Wholesale Price Index: The German Wholesale Price Index for June is predicted to increase by 0.2% monthly and by 1.3% annualized. Forex traders can compare this to the German Wholesale Price Index for May which increased by 0.3% monthly and by 1.6% annualized.
• Final Spanish CPI: The Final Spanish CPI for June is predicted to decrease by 0.1% monthly and to increase by 0.4% annualized. Forex traders can compare this to the previous Spanish CPI for June which decreased by 0.1% monthly and which increased by 0.4% annualized.
• Eurozone Industrial Production: Eurozone Industrial Production for May is predicted to increase by 0.2% monthly and to decrease by 1.6% annualized. Forex traders can compare this to Eurozone Industrial Production for April which decreased by 0.5% monthly and by 0.4% annualized.

In a week filled with US Fed Speeches as well as the semi-annual testimony by the Fed Chair to the House and Senate, Chicago Federal Reserve President Evans is scheduled to give a speech. Overall the tone struck this week was of a strong domestic economy with absent inflationary pressures and cross-current risks from a slowing global economy. Yesterday’s CPI data confirmed the absence of inflation, will today’s PPI data indicate the same and match economist’s expectations? How will this impact the EURUSD? Subscribe to the PaxForex Daily Fundamental Analysis and take the profitable side of this trade.

Here is the key factor to keep in mind today for US Dollar trades:

• US PPI: The US PPI for June is predicted to increase by 0.1% monthly and by 1.6% annualized. Forex traders can compare this to the US PPI for May which increased by 0.1% monthly and 1.8% annualized. The US Core PPI for June is predicted to increase by 0.2% monthly and by 2.1% annualized. Forex traders can compare this to the US Core PPI for May which increased by 0.2% monthly and by 2.3% annualized. The US Core PPI ex Trade for June is predicted to increase by 0.2% monthly and by 2.2% annualized. Forex traders can compare this to the US Core PPI ex Trade for May which increased by 0.4% monthly and by 2.3% annualized.

Should price action for the EURUSD remain inside the or breakout above the 1.1245 to 1.1285 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 1.1270
• Take Profit Zone: 1.1410 – 1.1445
• Stop Loss Level: 1.1200

Should price action for the EURUSD breakdown below 1.1245 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 1.1200
• Take Profit Zone: 1.1100 – 1.1120
• Stop Loss Level: 1.1245

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