The EURUSD doesn’t stop to amaze me. The quotation touched 1.3900 before the Friday close. During the past weekend Draghi had a speech in which he mentioned the possibility of quantitative easing because the Euro is pretty high and it will hurt EU’s economy. Exactly what we were talking in our last EURUSD Forecast and Price Action analysis.
The currency pair opened this week with a negative gap which is not yet closed. Yesterday EU posted a lower than expected Industrial Production (0.2%), while US surprised with Core Retail and Retail Sales above estimates. Business Inventories for the United States were a bit lower, but insignificant for the US dollar rally. The price targeted 1.3800 and everything was in its favor.
See our last analysis for this currency pair: EUR/USD Forecast And Price Action For April 10th;
Today the price continued to drop under yesterday’s low and reached 1.3800 before the most important releases of the day. Continue reading this article to see which are the relevant economic indicators for today and what is the price action analysis suggesting.
The following are expected today:
EU – German ZEW Economic Sentiment (10:00 GMT). Scheduled to be released in several minutes, the ZEW economic sentiment for Germany is one of the most important leading indicators for the EU. In March it dropped under 46.6, not well at all considering its expectations of 52.8. Today it is expected even lower, at 46.3. In line with the forecast or lower would be very bad for the European single currency. A release above 50 would trigger a rally for the Euro.
EU – ZEW Economic Sentiment (10:00). This is the European indicator from ZEW. It is considered to be a medium impact release. Last month it was published below expectations but well above the 50 level. For April it is expected to be 60.7.
US – Core CPI (13:30). As we know inflation is very important for the economy, especially in this period. US’ Core CPI is expected to be again 0.1%. A positive surprise would trigger a rally for the US dollar, while a negative surprise or in line with its forecast would trigger a 10 to 20 pips in favor for the EU.
US – Fed Chair Yellen Speaks (13:45). The Federal Reserve Chairman Janet Yellen is expected to deliver opening remarks at the Federal Reserve Bank of Atlanta’s Financial Markets Conference in Stone Mountain, via satellite.
US – TIC Long-Term Purchases (14:00). For this month the TIC is expected to be around 31.6B after it was published 7.3B last month. If the difference will be this big the dollar could be bought even more. Even if it is a medium impact indicator I would still keep an eye on its release.
These are the most important releases for today. I am very curious about the ZEW publications. If it will come as a positive surprise then we might see a bounce from 1.3800 back to 1.3825/30. If it will be released bellow expectation I would see a continuation of the drop towards 1.3744 or lower.
EUR/USD Price Action
The price of the EURUSD opened with a negative gap this week and continued a down trend towards the 200 EMA. A break below this indicator would clearly be a negative signal. I am expecting though a short bounce from 1.3800 before continuing this trend.