August 3, 2022
  • August 3, 2022

EUR / USD Forecast May 10-14 – Euro hits 10-week high

By on May 9, 2021 0

EUR / USD rebounded at the end of the week, with the pair posting its best weekly performance since November 2020, with gains of 1.22%. There are four releases in the coming week. HHere is an overview of the highlights and an updated technical analysis for the EUR / USD.

German retail sales for March shone with a 7.7% gain, crushing the estimate of 2.9%. Factory orders rose 3.0% and industrial production 2.5%.

The manufacturing sector continues to show strong growth in the euro area. The German manufacturing PMI shone with a reading of 66.2 and the Eurozone at 62.9 points. Services PMIs hover around the 50 level, which separates the contraction from the expansion.

In the eurozone, retail sales registered a respectable gain of 2.7%, above the estimate of 1.5%.

In the United States, manufacturing activity grew at a slower pace in April, with the ISM manufacturing PMI falling to 60.7 from 64.7. It was a similar story for business activity, as the ISM Services PMI slowed to 62.7 from 63.7. Both PMIs missed their estimates.

The market was looking for a non-farm payrolls blowout report for April, with an estimate of 990 thousand. Some analysts had even predicted a circulation of two million, but in the end, the economy created only 266,000 jobs. Unemployment rose to 6.1%, from 5.8% and above the estimate of 6.0%. There was a silver lining, as wage growth climbed 0.7%, rebounding -0.1% and above the forecast of 0.0%.

EUR / USD daily chart with support and resistance lines. Click to enlarge:

  1. Confidence of Sentix investors: Monday, 8:30 a.m. Investor optimism rose to 13.1 in April, its highest level since August 2018. The recovery is expected to continue in May, with a forecast of 14.9 points.
  2. German economic sentiment ZEW: Tuesday, 9:00 a.m. The indicator slowed to 70.7 in April, down sharply from 76.6 previously. The May estimate is 72.0 points.
  3. German CPI: Wednesday, 6 a.m. The initial estimate for the April report was 0.7% and the final reading should confirm the initial release.
  4. ECB Monetary Policy Meeting Accounts: Friday, 11:30 a.m. The ECB minutes will provide details of the April policy meeting. The central bank remains in an accommodating mode and investors will be looking for clues about future monetary policy.

Technical lines from top to bottom:

1.2398 is a monthly resistance line.

1.2241 is as follows.

1.2108 is the first level of support.

1.1975 has maintained its support since mid-April.

1.1890 (mentioned last week) is the last line of support at the moment.

I am neutral on EUR / USD

The euro has been hot since the start of April, but profit taking could dampen the current recovery. The US non-farm payroll has disappointed, but the dollar could rebound if the US numbers are positive.

Further reading:

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