Alpesh Patel's NewsletterPro - Will Euro make it above 1.3700 as the US Dollar remains weak?

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© Alpesh Patel

The Dollar continued to trade lower against the rest of the majors on Friday dropping to a 6-months low. The US economy has offered some disappointing economic releases lately and the Industrial and Manufacturing Production numbers on Friday were again luck luster.

There is concern among many parties that the economy may not be able to handle consecutive $10bn cuts in added stimulus by the Fed and that maybe this pace will be reduced in the near future. This concern is pressuring the US currency lower even though the pace of recovery remains satisfactory.

The Euro traded higher on the last day of the week lifted by the strong GDP figures released and the European currency made another effort to clear the 1.3700 barrier for a fourth time this year. At the time of typing this report the Single currency is trading at 1.3720 and whether this time the break will be successful will be decided by this week’s developments. We have the ZEW report on Tuesday and the PMIs on Thursday but today the calendar is light on any significant releases thus volatility is expected to remain low.

The Pound followed the Euro higher on the back of weak Production data from the US and lifted by the Bank of England’s decision to abandon their rate raising threshold last week. The central bank also upgraded its growth outlook for 2014 and this has cleared the way for the Pound to reach 1.7000 if the employment and consumer data scheduled for release this week print strong.

The FTSE 100 remained pretty much unchanged on Friday hovering around the 6,660 level and much will be decided on whether the index breaks above the 6,700 points level or dives below the 6,600 support.

European GDP figures and US Production data

The Economic Calendar for the first day of the week is empty of any important reports scheduled for release. However, the week ahead holds important news mainly from Europe. The inflation report from the UK and the ZEW Survey report scheduled for tomorrow, the Bank of England’s minutes and the minutes from the last Federal Reserve meeting on Wednesday and the PMIs on Thursday have the potential to spur new swings in the major currency pairs.

Economic Calendar

Time

Currency

Event

Importance

Forecast

Previous

No important economic events scheduled

 

 

TECHNICAL ANALYSIS & LEVELS

EUR/USD

GBP/USD

FTSE 100

Gold

 

 

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