EURUSD Forecast - January 23-27, 2012

EUR / USD had a very healthy week (after a long time, I might add), gaining 300 pips at the close. Time will tell if this is a new trend or just a correction. We’ll have a look at the new events and a brief technical analysis.

Consumer Confidence: 23.01.2012, 15:00. This official Euro-stat survey has been negative, showing negativity for a long time. It is estimated to indicate further down.

Flash PMI: 24.01.2012. Starts in France - 8:00, Germany - 8:30 and ends with the all-European information at 9:00. Purchasing managers’ indices indicates growth, and are divided into manufacturing and services sectors. German and French service sector records, all the rest are lower than 50 points, pointing to reduction. The statistics are estimated to remain equal to last month, showing a stressed services sector and a struggling manufacturing sector. All the indicators are estimated slight improvement.

Industrial New Orders: 24.01.2012, 10:00. New orders with manufacturers dissatisfied in the past two months, and fell short of expectations. After the smaller-than-expected rise of 1.8% last month, a drop of 2.1% is predicted now.

NBB Business Climate: 24.01.2012, 15:00. This figure climbed up last month to -10.6 points. The negative figure symbolizes weakening conditions. Another slight enhancement is likely, but the figure will probable remain negative.

German Ifo Business Climate: 25.01.2012, 9:00. Signs of stabilization have been seen here, with the score increasing for two months in a row. Another rise is expected from 107.2 to 107.7 points.

Mario Draghi talks: 25.01.2012, 13:15. The head of the ECB has had a positive impact on markets lately. This was seen in his encouraging message in the latest rate decision press conference, and with his announcement of seeing ‘signs of stabilization’ in the system. In a speech at Davos, it will be exciting to see what Draghi says.

German GfK Consumer Climate: 26.01.2012, 7:00. This analysis of 2000 consumers was very stable recently. Germany is not severely impacted by the debt crisis. The figure of 5.6 points seen in the past two months will possibly remain the same.

German Import Prices: 27.01.2012, 7:00. German economy has seen fluctuations in currency prices with a see-saw like performance. After last month’s climb of 0.4%, a further climb of 0.3% is expected now.

M3 Money Supply: 27.01.2012, 9:00. Expansion in the quantity of money in exchange moves prices and economies. After disappointing with a fall to 2%, a climb back to 2.3% is projected for December.

* All times are GMT

EUR / USD Technical Analysis

Last week :
Opened with a 50 pips gap down, at 1.2632 and tested 1.2620 level.
Dropped to 1.2625 immediately and then climbed, breach resistance at 1.2875
Climbed to 1.2985 on Friday and Closed at 1.2932

Technical levels for the pair, AUD / USD.
1.3280 - Strong Resistance
1.3145 - Strong Resistance
1.3074 - Strong Resistance
1.2985 - Resistance (Reached last week)
1.2874 - Strong Support
1.2760 - Weak Support
1.2660 - Weak Support
1.2623 - Weak Support
1.2587 - Strong Support

Downtrend channel broken

EUR USD is trading in a parallel, but wide channel. Downtrend resistance is more important than downtrend support, yet its fairly new. It was just broken, and needs to be confirmed. Downtrend support begins in October, but is far from the pair at the moment.

After talks about the Greek haircut shattered last week, they started again and it looks like they managed a deal. Further more, Spain’s auctions retreated from the danger zone and helped the single currency.

Slightly Bullish on EUR/USD
Greece seems to have a breath with its debt deal, although it hurts banks. And the successful Spanish auctions might open eyes of Italy. The debt crisis is not over yet, but we would like to put our money on Euro for this week.