EURUSD on Friday dropped -0.01% to 1.08550. Week ending 2024-07-26 moved lower by -0.41%. What you need to know.

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As requested, let’s look at EURUSD and the recent events that happened in the previous trading session.

EURUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.01%	-1.6 Pips
Week 2024-07-26	-0.41%	-44.2 Pips
July	1.12%	119.7 Pips

Upcoming key events for the new week (London Time)

  Tue 10:00 AM GDP (seasonally adjusted) (3-mth)
  Tue 10:00 AM GDP (seasonally adjusted) (12-mth)
  Tue 01:00 PM CPI Inflation Rate (12-mth)
  Wed 10:00 AM Harmonised Index of Consumer Prices (HICP) (12-mth)
  Wed 07:00 PM Fed Interest Rate Decision (Federal Funds Rate)
  Thu 01:30 PM Initial Unemployment Insurance Claims
  Fri 01:30 PM Nonfarm Payroll Employment
  Fri 01:30 PM Average Hourly Earnings (1-mth)
  Fri 01:30 PM Average Hourly Earnings (12-mth)

What happened over the week

The United States has shown mixed economic data in recent reports. The University of Michigan revealed an increase in the Michigan Index of Consumer Sentiment to 66.4 points in July, up slightly from 66 points in June, indicating a marginal improvement in consumer confidence. The Bureau of Economic Analysis reported a slight decrease in the annual Personal Consumption Expenditures (PCE) Price Index for June to 2.5% from 2.6% in May, signifying a minor decrease in inflation. However, on a monthly basis, the PCE Price Index rose to 0.1% in June from 0% in May. The second-quarter Gross Domestic Product (GDP) annual rate saw a significant rise to 2.8%, an improvement from the 1.4% growth in the first quarter, showing stronger overall economic performance. Despite these positive indicators, the U.S. Census Bureau reported a substantial drop in Durable Goods New Orders in June to -6.6% from 0.1% in May, mainly due to the transportation sector, even though orders excluding transportation rose to 0.5%. The Department of Labor indicated a reduction in Initial Unemployment Insurance Claims to 235,000 for the week ending 20 July, down from the revised figure of 245,000 in the previous week. Additionally, the change in new-home sales improved significantly on a month-on-month basis in June, narrowing to -0.6% from a revised -14.9% in May. These mixed indicators reflect some areas of economic strength amidst challenges.

In Germany, the GfK Consumer Confidence Survey indicated an improvement to -18.4 points for August, from a revised -21.6 points in July, suggesting a gradual recovery in consumer sentiment. Similarly, the Euro Area’s flash estimate for consumer confidence showed an improvement to -13 points in July, up from -14 points in June, according to the DG ECFIN. These improvements in consumer confidence in the Eurozone may signal a better economic outlook, albeit from a still relatively low base.

Given the economic data, the minimal dip of EURUSD (-0.01%) to 1.08550 on Friday and a weekly decline of -0.41% by the week ending July 26 can be influenced by the reported numbers. Stronger U.S. economic performance, particularly with improved GDP growth and lower unemployment claims, might strengthen the U.S. dollar. However, improvement in consumer confidence in the Eurozone could somewhat mitigate this, although the U.S. economic indicators appear more robust in the short term. Hence, the continued mixed picture in economic data from both regions is likely to keep the EURUSD range-bound, with potential for short-term fluctuations based on forthcoming economic reports and investor sentiment.

What can we expect from EURUSD for the new week and what happened on Friday?

EURUSD on Friday dropped -0.01% to 1.08550. Price is below 9-Day EMA while Stochastic is rising. For the week ending 2024-07-26, the pair dropped -0.41% or -44.2 pips lower.

Looking ahead on Monday, EURUSD looks mixed as the pair is likely to consolidate above week low of 1.08267.

For the new week, our technical outlook looks bearish, immediate support level is at 1.08210 (WS1) with break below could see further selling pressure towards 1.07870 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.09004 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 1.08267 would indicate selling pressure.

For the month of July, EURUSD is up by 1.12% or 119.7 pips higher.

Weekly key levels to watch out: