On Thursday the 27th of July, the euro/dollar closed down. A strengthening US dollar came on the back of profit-taking and a growth in US 10Y bond yields. The euro fell from its high of 1.1777 to 1.1650 (-127 pips). After trading closed in Europe, the rate restored to the LB (simple line with a period of 55). Now, let’s see what Friday has in store for us.
Durable goods orders in June grew by 6.5% (forecast: 3.1%, previous reading: -0.1%).
The number of continuing jobless claims for the week ending 22/07 came to 244,000 (forecast: 241,000, previous reading: 234,000).
Day’s news (GMT 3):
- 10:00 Switzerland: KOF leading indicator (Jul);
- 12:00 Eurozone: consumer confidence (Jul), business climate (Jul), industrial confidence (Jul), economic sentiment indicator (Jul);
- 15:00 Germany: CPI (Jul);
- 15:30 Canada: GDP (May);
- 15:30 USA: GDP annualised (Q2), GDP price index (Q2), employment cost index (Q2);
- 17:00 USA: Michigan consumer sentiment index (Jul);
- 20:20 USA: FOMC member Kashkari’s speech.
EURUSD rate on the hourly. Source: TradingView
The market has turned away from the US MA line and the 135th degree. From 1.1777, the euro rate corrected by nearly 112 degrees. A slide on the Swiss franc triggered a closing of positions on all its connected currency pairs. Today, the franc continues to surprise in Asia. Without any obvious fundamental catalysts, the dollar/franc pair has risen by 75 pips, to 0.9721. Including yesterday’s rally, the growth is now into double figures. If there’s no explanation for the franc’s collapse, the Swiss central bank will likely intervene. I was surprised to see the franc weaken on its own in the Asian session.
On Friday, trader attention will be turned towards the publication of GDP data in the US and Canada for the second quarter. Volatility will be high. I haven’t taken these statistics into account in my forecast, because there seems to be a contradictory picture between the euro/pound cross and euro/dollar pair. The trend suggests that the euro will return to 1.1704 and will close somewhere around the balance line.