EUR/USD Weekly Analysis 20 February 2017

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The most interesting event this week is the publication of the first FOMC meeting minutes of 2017 (31 January 2017 to 01 February 2017). The minutes are going to provide us with plenty of information about how the FOMC members plan on setting monetary policy for 2017, as well as some aspects about the stance that FOMC members towards President Trump’s fiscal policy.

The Inflation report of Eurozone area is the second interesting announcement this week, with the latest report showing a rise in inflation from 1.1% to 1.8%, which is the highest since February 2013. The prediction is to remain unchanged. However, if further inflation occurs for second consecutive time, it could be signalling that inflation in Eurozone has becoming uncontrollable, resulting from QE’s reduction.

Finally, the publication of UK’s economic report will have investors alert, as the post Brexit results showed that GDP has remained stable, but higher by 0.2% than the pre-Brexit levels also.

 

Weekly Economic Calendar (GMT+2)

The crucial economic events for this week are the following:

Tuesday 20 February 2017

RBA Meeting Minutes at 02:30

German Manufacturing and Services PMI at 10:30

Eurozone’s Manufacturing and Services PMI at 11:00

Mark Carney (Governor of Bank of England) speech at 12:00

EU Finance ministers meeting at 14:00

Philip Lowe (Governor of Reserve Bank of Australia) speech at 23:30

Wednesday 21 February 2017

German Ifo business climate index at 11:00

U. K’s economic growth report at 11:30

Eurozone’s inflation report at 12:00

Canadian retail sales at 15:30

Existing home sales at 17:00

FOMC meeting minutes’ publication at 21:00

Thursday 22 February 2017

Germany’s economic growth report at 09:00

Initial jobless claims at 15:30

Crude oil Inventories report at 18:00

Friday 23 February 2017

Philip Lowe (Governor of Reserve Bank of Australia) speech at 00:30

U. K’s BBA mortgage approvals at 11:30

Canadian inflation report at 15:30

New home sales at 17:00

CHARTING

The crucial points are:

1

The falling that had started in the previous weekly session has stopped at 1.05700 level. The news that came out in the previous Wednesday’s session had strongly affected the EUR/USD pair, with the USA inflation and retail sales reports having a positive effect on US Dollar, which has led to the price to reach the 1.05200 level. However, the FED’s char. Yellen’s testimony, combined by the larger than expected crude oil inventories, has forced the price to appreciate higher than 1.05700 within a daily session, and in the next session, the price reached the 1.06800 level. Today, the price is not anticipated to have such a large fluctuation, due to president’s day anniversary in the USA, as well as the Tuesday’s session. Although, this is possible to change on Wednesday’s session due to the FOMC meeting minutes releasing, which is possible to determine the course of the market in the current weekly session.

Charting outcome: Neutral

INDICATORS (computerized T.A)

The crucial points are:

2

3

The indicators are signaling that a weak downtrend has occurred. The moving averages slopes has become slightly more negative, while both the negative and the positive dynamic have risen. The trend dynamic has increased by +34.10%, whilst the market’s volatility has marginally decreased by -3.70%. Finally, the oscillators have remained into marginally oversold levels.

Indicators outcome: Marginally bearish – Neutral        

CONCLUSION

Both indicators and charting seem to confirm that the market is possible to follow the neutral path. Should the price break lower than 1.05700 level, the next support could occur at 1.05200 level. On the contrary, if the price appreciates higher than 1.06800 level, the price will find the next resistance at 1.07500 level.

 

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