EUR/USD: sideways ahead of news
EUR/USD was limited yesterday by the resistance at $1.3217 and approached today support at $1.3160, not far from the 6-week low at $1.3138. Euro zone’s retail sales added only 0.1% in July after contracting by 0.7% in June, while analysts expected a 0.5% growth.
The focus today is clearly on the ECB’s meeting (11:45 GMT) and press conference (12:30 GMT). The central bank is widely expected to reaffirm it will keep interest rates low to support the euro zone’s fragile recovery. Also pay attention to the rising political tensions in Italy where allies of Silvio Berlusconi are threatening to bring down the government if the Senate votes to expel him following a tax fraud conviction. According to the latest poll by Reuters, 39 of 54 forecasters expect move downside in EUR/USD in the near term.
Also watch German factory orders (10:00 GMT) and Spanish and French debt auctions. Later today there will be important data from the US on employment (12:15 GMT) and ISM manufacturing PMI (14:00 GMT). Trading will likely be pretty volatile today due to this multiple news.
Support lies at $1.3143/37 (200-, 100-day MAs), $1.3135 and $1.3105 (top of the Cloud, 50% Fibo of the advance from July to August). Resistance is at $1.3185 (55-day MA, 38.2% Fibo), $1.3200, $1.3217, $1.3227, $1.3255 (Aug. 30 high).
Chart. H4 EUR/USD