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EURUSD Weekly Fundamental Analysis: ECB can strengthen EUR

AtoZ Contributors | Apr. 9, 2019
EURUSD Weekly Fundamental Analysis: ECB can strengthen EUR

April 9, 2019, | AtoZ MarketsEURO is expected to be quite volatile this week having high impact economic reports and events to be held which is expected to impact the gains of EURO against USD in the process.

EU is quite concerned about the economic slowdown it is currently facing whereas all the countries in the European Union are struggling to maintain the momentum. According to European Commission’s vice president Valdis, Italy may be forced to freeze some of its plans for public expenditures as the country’s growth is slower than forecast.

Additionally, the European Commission is expected to set priorities for Eurozone budget for all countries in European Union but some of the countries are expecting separate budgets which might create certain internal conflicts in the zone as the current plans are not quite working in favor of Euro in the process.

ECB can strengthen EUR

On Wednesday, EURO Main Refinancing Rate report is going to be published which is expected to be unchanged at 0.00% along with Monetary Policy Statement which is expected to be neutral as well. The ECB Press Conference is also going to be held following the statement, which is expected to lead to certain momentum for the EURO gains if ECB manages to provide a positive statement about future plans of the economy in the process.

On the other hand, USD struggling with the worse economic reports managed to sustain the momentum over the EURO which does indicate that the EURO is not being favored by the market participants along the way. Recently US Average Hourly Earnings report was published with worse outcome of decrease to 0.1% from the previous value of 0.4% which was expected to be at 0.3% and the Unemployment rate remained unchanged as expected at 3.8%. Though the Non-Farm Employment Change was better than expected with an increase to 196k from the previous figure of 33k which was expected to be at 172k.

EURUSD Weekly Fundamental Analysis

The Employment Change was significantly better but having earnings decreasing does indicate unstable economic behavior which indicates certain weakness in the Employment sector of the economy. This week FOMC Meeting Minutes along with Federal Budget Balance report is going to be published on Wednesday, which is expected to show a decrease to -194.7B from the previous figure of -234.0B. Moreover, on Thursday, US PPI report is going to be published which is expected to increase to 0.3% from the previous value of 0.1% and FOMC Member Clarida and Bullard are going to speak about current and future monetary policy and short-term interest rate decisions.

As of the current scenario, the US is on the expectation of rate cut in the coming months turned indecisive as Employment data published recently was quite mixed and upcoming economic expectations are confusing. EURO is unable to regain its momentum due to slowdown, but further weakness observed in the US economic process may lead to certain gains this week in this pair.

Now let us look at the technical view. The price is currently pushing higher after consolidating and rejecting off the 1.1200 support area for a few days now which is expected to lead the price higher towards 1.1300 price area from where further continuation of the bearish pressure is expected in the process. As the price remains below 1.1300 with a daily close, the bearish bias is expected to continue.

Summary

EURO failing to gain momentum while the US struggles with the Employment reports does indicate the weakness of the EURO economy in the process. Ahead of Main Refinancing Rate and ECB Press Conference this week, certain volatility and EURO gains may be observed along the way.

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