Fundamental outlook

In this edition of the JRC Capital Management Weekly Outlook we analyze the exchange rate of the euro to the Greenback.

As expected, neither the Federal Reserve nor the European Central Bank adjusted their interest rate in their last meeting. Nonetheless, we can observe a downward trend in the EURUSD. Recent economic data from the USA were positive and the Fed confirmed that inflation is getting closer to the target of 2%, which makes the next interest rate hike just a matter of time. Meanwhile in Europe, the latest economic data were not as good as expected, this is may be a reason why the ECB is delaying announcing their tapering.

The 19th calendar week brings only a few economic data. On Thursday, the European Central Bank will publish their economic bulletin and from the USA we expect the figures for the consumer price index, which is in the focus of the Fed. On Friday, the University of Michigan will publish their consumer sentiment.

Technical analysis

Trend indicationResistance / Support
Short Term (daily)bearishResistance 11.2000
Medium Term (weekly)neutralResistance 21.2150
Long Term (monthly)neutralSupport 11.1900
Support 21.1750
European Central Bank delays tapering - EURUSD Chart

During this year the USDJPY knew only one direction – downwards. However, this changed in end of March. Since then we can see a slight recovery in the USDJPY of 300 pips and the course is getting closer to the 38.20% Fibonacci Retracement.

This is the first important resistance for the USDJPY and is located close to the round level of 108. Subsequently, the 50% Fibonacci Retracement is the next important resistance level, which is situated at 109.13 and thus close to another round level.

If the USDJPY bounces from a resistance level and drops in value, it will find its first important support area at 106. The price oscillated for a while around this level and found support and resistance there. If the price falls below the low of the year at 104.63, the bears will take in charge again.