No Relief For Euro As Dollar Rockets Higher

No Relief For Euro As Dollar Rockets Higher

By: Simon Furman | Where To Trade | On:07-01-2015 11:01
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Key Highlights

  • Euro continued to move lower and created a new low against the US dollar.

  • German Retail Sales released by the Statistisches Bundesamt Deutschland increased by 2% whereas the market was expecting it to be around 0%.

  • German Unemployment Rate released by the German Statistics Office decreased from 6.6% to 6.5%, but failed to lift the Euro.

  • Euro zone consumer price index released by the Eurostat decreased by 0.2% in December 2014, compared with the forecast of a 0.1% decline.

  • Italian Consumer Price Index released by the INSEE remained flat at 0% as expected.

  • Euro area Unemployment Rate released by the Eurostat remained at 11.5% as expected.

  • Italian Unemployment Rate released by the National Institute of Statistics increased from the previous revised reading of 13.3% to 13.4%.

  • Swiss Foreign Currency Reserves i.e. the foreign currency deposits and bonds held by Swiss National Bank increased to 495.1B.

  • USDCHF was seen surging higher as the US dollar was bid across the board.

US ADP Employment Change

Earlier during the NY session, the US ADP Employment Change was released by the Automatic Data Processing, Inc. The market was expecting it to register an increase to 225K. However, the outcome was very positive, as the US ADP Employment Change came in at 241K in December 2014. Moreover, the previous reading was revised up from 208K to 227K.

Euro Area CPI

Earlier during the London session, there were some major releases lined up in the Euro area including the consumer price index and unemployment data. The most important one was the Euro zone consumer price index, which was released by the Eurostat. The market was expecting a decline of 0.1% in December 2014, compared with the same month of the last year. However, the outcome missed the mark, as the Euro zone consumer price index declined by 0.2%. This was also down from the last increase of 0.3%. The data was very bearish for the Euro, as it puts the Euro area in serious deflation and might cause a lot of worries for the ECB. There were some positives at the same time, as the German Unemployment Rate released by the German Statistics Office decreased from 6.6% to 6.5%. However, the Euro buyers were unmoved after the release. The EURUSD pair was seen trading lower towards the 1.1850-40 support area.

Moreover, the Euro area Unemployment Rate was also released by the Eurostat. The outcome was as expected as the Unemployment Rate stayed at 11.5%. In short, the data was mostly bearish as the Euro area CPI played a lot on the mind of investors. The Euro is under immense bearish pressure and there is no hope for it to gain bids in the near term.

Technically, the EURUSD pair could test the 1.1800 support area in the short term and if the Euro sellers gain momentum, then a break below the mentioned area is also possible. The next level of interest in that case is around 1.1750.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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