EUR/USD: outlook for August 8-14
EUR/USD rose to 6-week highs above 1.12, but 2016 resistance line limited further advance. The pair was constrained on the upside by 100-day MA. All in all, the lines are horizontal, which means that there’s no strong pull for the pair in either direction. Below 1.1100 (50-week MA) the pair will head to the lower border of the recent trading range at 1.1015/00. Next support will be at 1.0960 (June-July support line).
Fundamentally there are reasons for the euro to find support at the mentioned levels. As the Bank of England has launched itself into new aggressive monetary stimulus measures, a more moderate approach of the European Central Bank will become distinct – a positive thing for the euro. Problems with European banking sector are not expected to harm the single currency in the near-term as well.
Next week watch German industrial production and Sentix investor confidence on Monday, German trade balance on Tuesday, French industrial production on Friday and the euro area’s preliminary GDP on Friday. It will be the second estimate of the region’s economic growth in Q2: according to the initial data GDP growth slowed down from 0.6% to 0.3%.