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28 Aug 2015
EUR/USD: a mixed bag; all eyes on US jobs and Fed 16th Sep
FXStreet (Guatemala) - EUR/USD was testing the 1.12 handle again in a final bit of volatility on continued Fed comments.
The uncertainty around the September meeting and outcome is building as we approach the end of the month and the Black Monday dust is starting to settle as we focus back on interest rate divergences for the short-term, although the significance and implications of China dumping the vast amounts of T-Bills this week should be worrisome longer term, but we digress. We also have the 'small' matter of the ECB and possible requirements of more QE due to current climate in commodity prices and deflationary pressure headwinds from China and the strength of the euro.
Fed's Fischer has essentially proposed that September may still be an appropriate time to hike interest rates if it had not been for the heightened awareness and sounds of alarm bells going off this week over China.
So it is now whether the dust and sentiment can continue to settle and improve between now and the September meeting over the 16th and 17th of the month. Data wise, we have labour market conditions week commencing 7th Sep after the ADP report and the Nonfarm Payrolls the previous week. We then have PPI's, Michigan Sentiment and Retail Sales, Empire States Manufacturing and Industrial Production to follow leading into the two-day meeting. All of these will be measured against a back-drop of very strong GDP Q2 and durable goods from this week and the Headline U.S. Consumer Price Index (CPI) to that rose for a second-consecutive Month in July, with the core rate of inflation holding steady at an annualized 1.8%, which is the highest print for 2015.
EUR/USD neutral
Technically, near term, the major remains offered below the 1.1460/70 level ahead of 1.1560 where rallies are likely to struggle if we progress along the bid. The 200 DMA on the hourly comes as 1.1285 offer immediate upside resistance on the 1.,12 handle ahead of the 50 DMA at 1.1330 today. The daily sticks offer a more neutral outlook with MACD turning more negative. On a continuation of the downtrend, the base of the channel is located at 1.0875.
The uncertainty around the September meeting and outcome is building as we approach the end of the month and the Black Monday dust is starting to settle as we focus back on interest rate divergences for the short-term, although the significance and implications of China dumping the vast amounts of T-Bills this week should be worrisome longer term, but we digress. We also have the 'small' matter of the ECB and possible requirements of more QE due to current climate in commodity prices and deflationary pressure headwinds from China and the strength of the euro.
Fed's Fischer has essentially proposed that September may still be an appropriate time to hike interest rates if it had not been for the heightened awareness and sounds of alarm bells going off this week over China.
So it is now whether the dust and sentiment can continue to settle and improve between now and the September meeting over the 16th and 17th of the month. Data wise, we have labour market conditions week commencing 7th Sep after the ADP report and the Nonfarm Payrolls the previous week. We then have PPI's, Michigan Sentiment and Retail Sales, Empire States Manufacturing and Industrial Production to follow leading into the two-day meeting. All of these will be measured against a back-drop of very strong GDP Q2 and durable goods from this week and the Headline U.S. Consumer Price Index (CPI) to that rose for a second-consecutive Month in July, with the core rate of inflation holding steady at an annualized 1.8%, which is the highest print for 2015.
EUR/USD neutral
Technically, near term, the major remains offered below the 1.1460/70 level ahead of 1.1560 where rallies are likely to struggle if we progress along the bid. The 200 DMA on the hourly comes as 1.1285 offer immediate upside resistance on the 1.,12 handle ahead of the 50 DMA at 1.1330 today. The daily sticks offer a more neutral outlook with MACD turning more negative. On a continuation of the downtrend, the base of the channel is located at 1.0875.