EUR/USD: Weekly Technical Analysis For Aug 4-8, 2014

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EURUSDH4

The US dollar continued to see strength over the Euro during last weeks trading session but quickly trimmed gains on Friday after data revealed the U.S. economy picked up fewer payrolls in July than markets were hoping. Earlier in the week, the Markit research group said that Germany’s manufacturing purchasing managers’ index fell to 52.4 last month from 52.9 in June. Analysts had expected the index to remain unchanged. For the entire euro zone, Markit said the manufacturing PMI ticked down to 51.8 in July, from a reading of 51.9 the previous month. Analysts had also expected the index to remain unchanged.

 

The Labor Department reported earlier that the U.S. economy added 209,000 jobs in July, missing expectations for an increase of 233,000. The number of jobs added in June was revised up to a 298,000 gain from a previously estimated rise of 288,000. The report also showed that the U.S. unemployment rate ticked up to 6.2% last month from 6.1% in June. Analysts had expected the rate to remain unchanged in July. Investors avoided the dollar on the data to reexamine how much time will past from when the Federal Reserve will wind down its bond-buying stimulus program and when it will begin hiking benchmark interest rates. While the economy is improving, the Fed noted in its July statement on interest rates this week that slackness remains in the labor market.

 

Separately in the U.S., the Institute of Supply Management reported that the U.S. manufacturing purchasing managers’ index rose to 57.1 in July from 55.3 in June, beating expectations for an increase to 56.0, though investors avoided the greenback due to jobs and sentiments reports.

 

Overall, there is still signs of weakness in the Euro currency and weekly bias remains slightly on the downside as 21 and 55 EMA’s are still pointing southwards. However, the pair seems to be in a neutral tone for now as MACD and RSI oscillators are giving a sign that bullish momentum is building up around corner. Demand for the pair caused by the poor Job reports from the US economy should be limited around 1.35000 psychological zones and then more decline should be seen if we get a price reversal action around 1.35000 resistance area and a break of 1.33645 support should bring more supply to 1.32961.

 

A key economic indicator that would determine the fate of the Euro in the coming week is the Euro Central Bank Press Conference meeting scheduled on Thursday, so i advised strong caution before making trading decision on this pair.

 

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