EURUSD on Friday dropped -0.03% to 1.09148. Week ending 2024-08-09 rose 0.04%. What happened.

Dear ,

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	-0.03%	-3.4 Pips
Week 2024-08-09	0.04%	4 Pips
August	0.84%	90.9 Pips

Upcoming key events for the new week (London Time)

  Tue 01:30 PM PPI excluding Food and Energy sectors (12-mth)
  Wed 10:00 AM GDP (seasonally adjusted) (3-mth)
  Wed 01:30 PM CPI Inflation Rate (1-mth)
  Wed 01:30 PM CPI Inflation Rate (12-mth)
  Thu 12:00 AM Assumption of Mary
  Thu 01:30 PM Initial Unemployment Insurance Claims
  Thu 01:30 PM Monthly Retail Trade (1-mth)

What happened over the week

In Germany, the Harmonised Index of Consumer Prices (HICP) for July remained consistent with the previous month’s figure at 2.6%, as reported by Destatis. Additionally, the country’s trade balance, seasonally adjusted, showed a significant drop to €20.4 billion in June, down from €24.9 billion in May. This reflects a decrease in Germany’s export surplus, indicating challenges in the country’s international trade activities.

In the Euro Area, retail trade turnover for June experienced a decline, slipping to -0.3% from 0.1% recorded in May. On a yearly basis, the retail trade turnover also fell to -0.3% in June compared to the previous figure of 0.5% in May, which was initially revised up from 0.3%, according to Eurostat. Meanwhile, the Euro Area Producer Price Index (PPI) showed a positive movement, increasing to 0.5% in June from a previous -0.2% in May. However, the Euro Area sentix Economic Index for August dropped to -13.9 points from -7.3 points in July, indicating a decline in economic sentiment within the Eurozone.

In the United States, the labor market showed signs of improvement as the Initial Unemployment Insurance Claims for the week ending August 3rd decreased to 233,000 from the revised figure of 250,000 for the previous week, according to the Department of Labor. This decline suggests a tightening labor market, which is often seen as a positive indicator for the economy.

The recent economic data releases are likely to affect the EURUSD exchange rate by exerting downward pressure on the euro relative to the U.S. dollar. The significant decrease in Germany’s trade balance and the declining retail trade turnover in the Euro Area signal potential weaknesses in the region’s economic performance. The drop in the sentix Economic Index further exacerbates concerns about the Eurozone’s economic outlook. In contrast, positive developments in the U.S. labor market, as indicated by the reduced unemployment claims, bolster the strength of the U.S. dollar. Consequently, these contrasting economic indicators contribute to a weakening euro against the strengthening dollar, reflected in the slight drop of EURUSD by -0.03% to 1.09148 on Friday. The overall weekly rise of 0.04% could be attributed to the cumulative market reactions to other factors, but the news of deteriorating European economic conditions would likely overshadow any temporary gains, putting continued strain on the EURUSD pair.

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

EURUSD on Friday dropped -0.03% to 1.09148. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2024-08-09, the pair rose 0.04% or 4 pips higher.

Looking ahead on Monday, EURUSD looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.09631 or at least consolidates above Weekly Pivot level of 1.09201. On the downside, we are looking at week low 1.08823 or 1.08770 (WS1) as immediate support level. EURUSD need to break on either side to indicate a short-term bias. A break above 1.09631 would suggest bullish bias after recent positive movement.

For the month of August, EURUSD is up by 0.84% or 90.9 pips higher.

Weekly key levels to watch out: