Source: PaxForex Premium Analytics Portal, Fundamental Insight
French non-farm payrolls for the second quarter rose 0.4% quarterly. Economists predicted an increase of 0.5%. Forex traders can compare this to French non-arm payrolls for the second quarter, which Increased 0.3% quarterly.
The French Trade Balance for July is predicted at -€13.56B. Forex traders can compare this to the French Trade Balance for June, reported at -€13.07B.
The European Central Bank is expected to raise interest rates by 75 basis points to 1.25%. Forex traders can compare this to the previous European Central Bank, where the ECB increased interest rates by 50 basis points to 0.50%. A 50 basis point increase in the deposit rate facility to 0.50% is also expected.
The South African Current Account for the second quarter is predicted at ZAR100.0B, and the Current Account Percentage of GDP at 1.60%. Forex traders can compare this to the South African Current Account for the first quarter, reported at ZAR143.0B, and the Current Account Percentage of GDP at 2.20%.
South African Manufacturing Production for July is predicted to drop 0.7% monthly and to expand 4.0% annualized. Forex traders can compare this to South African Manufacturing Production for June, which contracted 1.5% monthly and 3.5% annualized.
Today’s ECB meeting could move the Euro amid volatile, high-volume trading following the press conference. Markets expect a 75 basis point increase, as the only ECB mandate is price stability. One area traders will focus on during the press conference is the potential of quantitative tightening, which the ECB failed to discuss publicly. Any absence of QT could translate to higher interest rates as inflation in the Eurozone nears 10%. Traders should be cautious with trading the Euro until after the press release, as the ECB could surprise markets in either direction.
The forecast for the EUR/ZAR remains cautiously bullish as the Euro can extend its recovery after moving above its flat Ichimoku Kinko Hyo Cloud, which now provides a healthy support level. Adding to the bullish outlook is the ascending Tenkan-sen, but volatility could remain elevated until the flat Kijun-sen moves higher. Forex traders should monitor the CCI, which reached extreme overbought territory. A temporary contraction below 100 could precede the next rally in this currency pair, and traders should exercise patience. Can bulls continue to push the EUR/ZAR towards its next horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the EUR/ZAR remain inside the or breakout above the 17.1900 to 17.3774 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 17.2800
- Take Profit Zone: 18.2900 – 18.4500
- Stop Loss Level: 16.9500
Should price action for the EUR/ZAR breakdown below 17.1900, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 16.9500
- Take Profit Zone: 16.3900 – 16.5725
- Stop Loss Level: 17.1900
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