EUR/USD Forecast for 17th to 21st December, 2012

The EURO had an outstanding week, eyeing levels last seen in the month of May. The USD was damaged by the announcement of QE4 in the US. Greece’s situation certainly helped EURO, but Germany shows some gloomy figures.

1. Trade Balance : 17^th Dec., 10:00 GMT. The euro zone seasonally adjusted trade surplus widened to 11.3 billion Euros, above analyst’s forecast for 9.5 billion Euros surplus. Exports dropped 1.1% on September from 3.3% gain in August while imports declined by 2.7% from 2.3% registered in August.

2. German Ifo Business Climate : 19^th Dec., 9:00 GMT. This index climbed in November to 101.4, from 100 in October, opposing to predictions of more decline in sentiment. The reading may have been influenced by helpful data from the US and China. A climb to 101.9 is estimated now.

3. Current Account : 19^th Dec., 9:00 GMT. The surplus of the eurozone’s current account plunged to 0.8 billion euros in September following 10.9 billion euros the August. The surplus over the 12 months to September, exposed a surplus of 77.8 billion, compared with a shortfall of 7.6 billion in the same period last year. Current account surplus is projected to rise to 5.8 billion.

4. German Producer Price Index : 20^th Dec., 7:00 GMT. Producer Price Index remained unmoved in October opposing to predictions of a 0.1% gain, following a 0.3% increase in the earlier month. The 12 month decline in Producer Price Index was not reflected in the core PPI; signifying output prices remain constrained by weak domestic demand. The forecast is a  decline of 0.1%.

5. NBB Business Climate – Belgium : 20^th Dec., 14:00 GMT. Confidence among Belgian business leaders has grown in November to -13.4 from -13.5 in the previous month. Economists forecasted an un-changed reading. Additional decline to -14.3 is forecasted.

6. Eurozone - Consumer Confidence : 20^th Dec., 15:00 GMT. Euro zone consumer confidence fallen in last month to -27 following -25.7 in October caused by the debt crisis. Even under severe cuts, a raise to -26 is projected now.

7. GfK Consumer Climate – Germany : 21^st Dec., 7:00 GMT. This indicator dropped in November to 5.9 from 6.1 in October, upon the current debt crisis in the Union. Even with this decline, the survey shows Germans do not fear recession. Household sentiment remains to be acceptable and private expenditure is continuing to be the main strength in the German economy. No change is estimated.

Technical lines from top to bottom:

1.3600 – Strong Resistance

1.3480 – Strong Resistance

1.3400 – Strong Resistance

1.3290 – Strong Resistance

1.3170 – Strong Resistance ( Keep an eye for break or bounce )

1.3130 – Weak Resistance                  

1.3000 – Strong Support         

1.2880 – Strong Support         

1.2750 – Strong Support                                 

1.2690 – Strong Support

We will stay bullish EUR/USD this week.