EUR/USD: outlook for August 22-28
During the past week EUR/USD mounted from the bottom of the 4-week bullish channel to its top. Next week some correction to the downside may develop. Support is at 1.1260, 1.1235 and 1.1190. Resistance is at 1.1380, 1.1405 and 1.1450.
The euro has been holding its ground recently, despite the fact that its current levels are not supported by the yield differentials. Generally cheaper US dollar partly explains this phenomenon.
So far economic data from the euro area was mostly alright, pointing that the region is not hit hard by the Brexit. July inflation reading was positive, economic sentiment improved and current account surplus remains big. Next week the euro zone will release flash manufacturing PMIs on Monday. Germany will publish Ifo business climate index on Tuesday. All in all, for now traders don’t think that the European Central Bank will necessarily have to ease policy in September. This is a supporting factor for the single currency.