The outlook for the euro became better yesterday as official sources claimed that Greece’s creditors drafted the broad lines of an agreement which is due to be discussed today in a meeting between Alexis Tsipras and the European Commission President, Jean-Claude Juncker. The European currency experienced an episode of appreciation, but shortly after that the silence became the traders’ answer.
The Euro also enjoys the increase in the level of inflation: Flash CPI 0.3% and Flash Core CPI 0.9%. During today, the ECB will announce the interest rate, a decision that may not involve changes, but volatility could increase as the press conference starts. From a technical standpoint, the outlook for EURUSD is positive considering the Pennant formation (recently formed on an hourly price chart) and a breakout of the resistance area 1.1188 – 1.1200 could help the price move towards 1.1300 and further to 1.1350. If, on the H4 interval, the quotation closes below the 1.1115 support, this scenario would invalidate and the market could fall to the local support area.
The Australian dollar has recently enjoyed good news as the Australian Central Bank announced it would keep the interest rate to 2%, while the Governor Glenn Stevens was reluctant to a further interest rate cut. In addition, the quarterly GDP was published to 0.9%, a better number than the estimates and even than the last report. It looks like the good data are due to the increase of the coal and iron ore exports and the business investments that didn’t fall as expected. The AUDUSD currency pair marked a correction of the recent descending tendency. Currently, the 38.2 – 41.4 Fibonacci retracement levels work as a resistance area, while a breakout could support the advance up to the 50 Fibonacci level.
The oil quotations (both Brent and WTI) begin to show signs of weakness as the core Gulf members of the Organization of the Petroleum Exporting Countries have a consensus to maintain the group’s oil output at its meeting this week. The official announcement can cause episodes of depreciation for the price of oil, but the fall could not be spectacular as the oversupply phenomenon is already integrated in price.
During today and tomorrow shall be published several important data that could offer the market a particular volatility, which will reach its peak on Friday with the publication of NFP in the United Stated. Until then, we should pay attention to the evolution of the American dollar as is due to be published the ADP Non-Farm Employment Change, the Trade Balance, the ISM Non-Manufacturing PMI and the Unemployment Claims. This time to the data risk to disappoint the traders’ estimates, a fact that could weigh heavily on the dollar. Also, the British Pound worth attention as traders wait for the release of the Services PMI, Official Bank Rate and MPC Rate Statement. Market participants may search through the data for positive signals in order to help the Sterling pound recover the losses of the last two weeks.