By: TradeHits.com
We all saw the EURUSD finish the 2013 year strong, only to watch it crash in the waking week of 2014. We should expect to see a lot of movement this week as we have a lot of factors dictating the direction of the all mighty pair; Service PMI’s, high retail sales, German inflation data, and probably most importantly, the ECB rate decision and Draghi’s press conference.
Germany and France continue to diverge, according to the confirmed manufacturing PMI’s. Unemployment claims took a dip by 107.6, but overall, data taken from the US should allow us to safely expect the comeback of the USD. The pair broke below a very long upward trend and stopped just short of the week ending.
Some important notes to play off of this week:
Retail Sales: Retail sales in the Euro area continued to fall in October, adding concerns that the fragile economic recovery in the 17-country Eurozone is losing momentum. Declines in the PMI’s for Italy and France raise the possibility that these economies will remain in recession in the fourth quarter. However Germany’s robust economic growth tips the scale for the Eurozone as a whole. A gain of 0.2% is forecasted.
Unemployment Rate: Eurozone’s unemployment has declined for the first time since 2011. ECB president Mario Draghi remarked that low inflation and weak economic growth are the dominant characteristics of the region. The European Commission has forecast growth of 1.1% for 2014 and 1.7% for 2015. The Eurozone’s unemployment rate is expected to remain 12.1%.
EUR/USD Technical Analysis
The EUR/USD began the week with an attempt recapture the 1.3830 line. The failed attempt proved that the holiday surge was indeed a false break. From that moment on, it was downhill, with a short lived recovery attempt that stalled at 1.3675 in a perfect manner. After losing its uptrend support, the pair stopped at 1.3588.
This analysis was provided by TradeHits.