All eyes will be on the ECB press conference which will follow 45 minutes after the announcement on interest rates where no change is anticipated. Will the ECB open the door for more fiscal stimulus and potentially negative interest rates in response to the bigger-than-expected slowdown in the Eurozone? The Euro is expected to come under a spike in volatility during the press conference. Prior to that, the release of German IFO data, expected to weaken further, will keep forex traders busy. Is now the time to buy the EURUSD? Today’s fundamental analysis will take a look at where price action may be headed next.
Here are the key factors to keep in mind today for Euro trades:
- Spanish Unemployment Rate: The Spanish Unemployment Rate for the second-quarter is predicted at 13.7%. Forex traders can compare this to the Spanish Unemployment Rate for the first-quarter which was reported at 14.7%.
- German IFO: The German IFO Business Climate Index for July is predicted at 97.1. Forex traders can compare this to the German IFO Business Climate Index for June which was reported at 97.4. The German IFO Current Assessment Index for July is predicted at 100.4. Forex traders can compare this to the German IFO Current Assessment Index for June which was reported at 100.8. The German IFO Expectations Index for July is predicted at 94.0. Forex traders can compare this to the German IFO Expectations Index for June which was reported at 94.2.
- ECB Rate Decision: The ECB is predicted to keep its Interest Rate at 0.00%, its Deposit Facility Rate at -0.40% and its Marginal Lending Facility Rate at 0.25%; this would equal no change in the ECB rate policy from the previous meeting.
Forex traders well get a series of key economic data out of the US with durable goods orders front and center. Economists predict an increase across the board, but with regional reports clocking in weaker than anticipated and Manufacturing PMI data dropping to 50.0 the risk remains to the downside. Will today’s data give bears the ammunition to force the US Dollar to the downside and ignite a short-covering rally in the EURUSD? Follow the PaxForex Daily Fundamental Analysis and join our fast growing community of profitable forex traders!
Here are the key factors to keep in mind today for US Dollar trades:
- US Inventories: US Preliminary Wholesale Inventories for June are predicted to increase by 0.4% monthly and US Preliminary Retail Inventories are predicted to increase by 0.2% monthly. Forex traders can compare this to US Wholesale Inventories for May which increased by 0.4% monthly and to US Retail Inventories which increased by 0.5% monthly.
- US Preliminary Durable Goods Orders: US Preliminary Durable Goods Orders for June are predicted to increase by 0.7% monthly and Durables Excluding Transportation are predicted to increase by 0.2% monthly. Forex traders can compare this to US Durable Goods Orders for May which decreased by 1.3% monthly and to Durables Excluding Transportation which were increased by 0.4% monthly. Capital Goods Orders Non-Defense Excluding Aircraft for June are predicted to increase by 0.3% monthly and Capital Goods Shipments Non-Defense Excluding Aircraft are predicted to increase by 0.2% monthly. Forex traders can compare this to Capital Goods Orders Non-Defense Excluding Aircraft for May which increased by 0.5% monthly and to Capital Goods Shipments Non-Defense Excluding Aircraft which increased by 0.6% monthly.
- US Advanced Goods Trade Balance: The US Advanced Goods Trade Balance for June is predicted at -$72.2B. Forex traders can compare this to the US Advanced Goods Trade Balance for May which was reported at -$74.5B.
- US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of July 20th are predicted at 220K and US Continuing Claims for the week of July 13th are predicted at 1,688K. Forex traders can compare this to US Initial Jobless Claims for the week of July 13th which were reported at 216K and to US Continuing Claims for the week of July 6th which were reported at 1,686K.
- US Kansas City Fed Manufacturing Activity Index: The US Kansas City Fed Manufacturing Activity Index for July is predicted at 2. Forex traders can compare this to the US Kansas City Fed Manufacturing Activity Index for June which was reported at 0.
Should price action for the EURUSD remain inside the or breakout above the 1.1110 to 1.1155 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.1135
- Take Profit Zone: 1.1280 – 1.1320
- Stop Loss Level: 1.1160
Should price action for the EURUSD breakdown below 1.1110 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.1080
- Take Profit Zone: 1.0820 – 1.0915
- Stop Loss Level: 1.1110
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