After the ECB decided to hold interest rates, forex traders will get a healthy dose of inflation as well as GDP data out of the Eurozone and individual member countries. Germany reported a surprise drop in annualized retail sales, but the Euro remained in a holding pattern near key levels. Most forex traders are likely to await the announcement of the US Fed interest rate decision. Can the EURUSD finish today’s trading session on a high note? Follow the PaxForex Daily Fundamental Analysis and earn more pips per trade!
Here are the key factors to keep in mind today for Euro trades:
- German Retail Sales: German Retail Sales for June increased by 3.5% monthly and decreased by 1.6% annualized. Economists predicted an increase of 0.5% monthly and of 2.7% annualized. Forex traders can compare this to German Retail Sales for May which decreased by 1.7% monthly and which increased by 3.8% annualized.
- French CPI: The French CPI for June decreased by 0.2% monthly and increased by 1.1% annualized. Economists predicted a decrease of 0.3% monthly and an increase of 1.2% annualized. Forex traders can compare this to the French CPI for May which increased by 0.2% monthly and by 1.2% annualized. The French Harmonized CPI for June decreased by 0.2% monthly and increased by 1.2% annualized. Economists predicted a decrease of 0.2% monthly and an increase of 1.2% annualized. Forex traders can compare this to the French Harmonized CPI for May which increased by 0.3% monthly and by 1.4% annualized.
- Spanish GDP: The Preliminary Spanish GDP for the second-quarter increased by 0.5% quarterly and by 2.3% annualized. Economists predicted an increase of 0.6% and of 2.3%. Forex traders can compare this to the Spanish GDP for the first-quarter which increased by 0.7% quarterly and by 2.4% annualized.
- German Unemployment Change and German Unemployment Rate: The German Unemployment Change for July is predicted at 2K and the German Unemployment Rate at 5.0%. Forex traders can compare this to the German Unemployment Change for June which was reported at -1K and to the German Unemployment Rate which was reported at 5.0%.
- Eurozone Unemployment Rate: The Eurozone Unemployment Rate for June is predicted at 7.5%. Forex traders can compare this to the Eurozone Unemployment Rate for May which was reported at 7.5%.
- Italian Unemployment Rate: The Italian Unemployment Rate for June is predicted at 10.0%. Forex traders can compare this to the Italian Unemployment Rate for May which was reported at 9.9%.
- Spanish Current Account: The Spanish Current Account for May is predicted at -€0.70B. Forex traders can compare this to the Spanish Current Account for April which was reported at -€0.41B.
- Italian CPI: The Preliminary Italian CPI for June is predicted to increase by 0.1% monthly and by 0.5% annualized. Forex traders can compare this to the Italian CPI for May which increased by 0.1% monthly and by 0.7% annualized. The Preliminary Italian Harmonized CPI for June is predicted to decrease by 0.7% monthly and to increase by 0.5% annualized. Forex traders can compare this to the Italian Harmonized CPI for May which increased by 0.1% monthly and by 0.8% annualized.
- Eurozone CPI and Eurozone Core CPI: The Eurozone CPI for July is predicted to increase by 1.1% annualized and the Eurozone Core CPI is predicted to increase by 1.0% annualized. Forex traders can compare this to the Eurozone CPI for June which increased by 1.2% annualized and to the Eurozone Core CPI which increased by 1.1% annualized.
- Eurozone GDP: The advanced Eurozone GDP for the second-quarter is predicted to increase by 0.2% quarterly and by 1.0% annualized. Forex traders can compare this to the Eurozone GDP for the first-quarter which increased by 0.4% quarterly and by 1.2% annualized.
- Italian GDP: The Preliminary Italian GDP for the second-quarter is predicted to decrease by 0.1% quarterly and by 0.2% annualized. Forex traders can compare this to the Italian GDP for the first-quarter which increased by 0.1% quarterly and which decreased by 0.1% annualized.
All eyes will be on the FOMC interest rate decision where a 25 basis point interest rate cut is expected. The US Dollar has traded at multi-week highs despite this threat as some traders believe the US Fed may follow the Bank of Japan and the ECB with their holding pattern. Will the Fed deliver the interest rate cut and if they do, what will be next? The US Dollar is at risk of a heavy sell-off if more cuts will be announced. How will this impact the most liquid currency pair, the EURUSD? Today’s fundamental analysis will take a look at the upside potential and the downside risk of this currency pair.
Here are the key factors to keep in mind today for US Dollar trades:
- US ADP Employment Change: The US ADP Employment Change for July is predicted at 150K. Forex traders can compare this to the US ADP Employment Change for June which was reported at 102K.
- US Employment Cost Index: The US Employment Cost Index for the second-quarter is predicted to increase by 0.7% quarterly. Forex traders can compare this to the US Employment Cost Index for the first-quarter which increased by 0.7% quarterly.
- US Chicago PMI: The US Chicago PMI for July is predicted at 51.5. Forex traders can compare this to the US Chicago PMI for June which was reported at 49.7.
- US FOMC Interest Rate Decision: The US FOMC Interest Rate Decision is predicted to show Upper Bound interest Rates at 2.25% and Lowe Bound Interest Rates at 2.00%. Forex traders can compare this to the previous US FOMC Interest Rate Decision which showed Upper Bound interest Rates at 2.50% and Lower Bound Interest Rates at 2.25% The Interest Rate on Excess Reserves is predicted at 2.10%. Forex Traders can compare this to the previous Interest Rate on Excess Reserves which was reported at 2.35%.
Should price action for the EURUSD remain inside the or breakout above the 1.1130 to 1.1180 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 1.1130 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.1090
- Take Profit Zone: 1.0955 – 1.1000
- Stop Loss Level: 1.1130
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