EUR/USD Weekly Fundamental Analysis For May 23-27, 2011
By ForexMansion.com
The volatility remains high for the EUR/USD with the uncertainty hovering over the outlook for growth amid inflation threats and debt woes.
Last week the pair continued to fluctuate heavily amid the mixed sentiment in the market with investors growing pessimistic with the downbeat U.S. data and also cautious over the euro with the speculation over the outlook for Greece.
Debt-laden nations continue to suffer in the euro area and the Greek tragedy is still the center of attention. While for the United States, the slowing pace of recovery is agonizing the dollar as the Feds pledge to keep rates lower while also threatening the market sentiment that continued to trade on thin air!
This week growth is likely to be the predominant sentiment with investors wary over the slowing signs of the recovery. We have GDP revision for the first quarter from both Germany and the United States which will determine the sentiment over growth and accordingly monetary policy.
Other news from the euro area and the U.S. economy to affect the pair this week:
Monday May 23:
The start of the week will be with euro area’s sectors performance in May as investors are downbeat already over the outlook for the slowing global recovery. Germany will start with the Flash PMI estimates for May at 07:30 GMT. The manufacturing PMI might have slowed to 62.3 from 62.9 and the Services might have eased to 61.3 from 62.0.
The euro area Flash PMI May estimates are due at 08:00 GMT the Manufacturing is expected to slow to 57.6 from 58.0 and Services also slower to 56.6 from 56.7.
Tuesday May 24:
The start is at 06:00 GMT with the final revision for the German first quarter GDP which is likely unrevised at its strong 1.5% expansion. Also Germany’s IFO business survey will be watched at 08:00 GMT where the drop in confidence seen lately is still ongoing due to the uncertain outlook, debt woes in the euro area, and rising inflation and commodity prices which are pressuring the sentiment.
The euro area’s industrial orders for March are due at 09:00 GMT are marginally expected to affect the currency following the early news, and especially as we already saw factory orders drop heavily on the month and likely the same will be seen.
At 14:00 GMT, the U.S. will release the new home sales index for the month of April, where new home sales are expected to rise by 1.7% to an annual rate of 305,000 units, compared with the prior estimate of 300,000 units, although the housing market showed further weakness in April, as the housing market remains depressed.
Wednesday May 25:
German Gfk confidence is due at 06:00 GMT for the month of June and might have eased from May’s 5.7.
At 12:30 GMT, the U.S. will release the durable goods orders for the month of April, where durable goods orders are expected to drop by 2.0%, compared with the prior rise of 2.5%, while durable goods excluding transportation are expected to rise by 0.6%, compared with the prior rise in March by 1.3%.
Meanwhile, at 14:00 GMT, the U.S. will release the house price index for the month of March, where house prices are expected to fall by 0.5%, compared with the prior drop of 1.6%.
Thursday May 26:
We do not have any major fundamentals from the euro area on Thursday, yet Trichet is scheduled to speak on the economy at 09:20 and any hints on the outlook for growth, inflation, and monetary policy might affect the euro.
The focus will be at 12:30 GMT and the U.S. second estimate for Gross Domestic Product index for the first quarter of 2011. The economy is expected to have expanded by 2.2%, compared with the prior estimate of 1.8%, while personal consumption is expected to rise by 2.8%, compared with the prior rise of 2.7%. The GDP price index is expected to remain unchanged at 1.9% in the first quarter, while core PCE is also expected to remain unchanged at 1.5% during the first quarter of 2011.
At the same time the jobless claims for the week ending May 21, will be released, where jobless claims dropped last week to 409,000, while continuing claims also fell to 3.711 million.
Friday May 27:
The week will end with German CPI and retail sales which might add to the euro’s volatility at the end of the week. The euro area will report the M3 Money Supply at 08:00 GMT which might not affect the pair much yet the European Commission’s confidence survey for May due at 09:00 GMT will affect the euro. Confidence across sectors might have slowed further with rising uncertainty over the outlook amid rising inflation and fiscal challenges which might pressure the euro to the downside.
The income report will be released for the month of April at 12:30 GMT, where personal income is expected to rise by 0.4% in April, compared with the prior rise of 0.5%, while personal spending is expected to rise by 0.4%, compared with the prior rise of 0.6%. The income report is also expected to show that core PCE rose in April by 0.2%, compared with 0.1% reported in March, while compared with a year earlier, core PCE is expected to rise by 1.0%, compared with the prior rise of 0.9%, and the PCE deflator is expected to rise by an annualized 2.1%, compared with the prior rise of 1.8%.
At 13:55 GMT, the University of Michigan will release the final estimate for consumer confidence in May, where consumer confidence is expected to remain unchanged at 72.4 in line with the prior estimate. While the last awaited for the week will be at 14:00 GMT with the pending home sales index for April, where pending home sales are expected to drop by 1.0% in April, compared with the prior rise of 5.1% reported in March.
Originally posted here
Read more about forex technical analysis, forex fundamental analysis and forex news on ForexMansion.com
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www.ForexMansion.com is a part of the Finance Mansion Network which operates global financial websites. Our goal is to provide our readers with the most accurate, quality and up-to-date technical analysis, fundamental analysis and news in order to assist them in making the right financial decisions.
The Finance Mansion Network includes www.FinanceMansion.com,www.ForexMansion.com, www.StocksMansion.com, www.CommoditiesMansion.com and many more.
The volatility remains high for the EUR/USD with the uncertainty hovering over the outlook for growth amid inflation threats and debt woes.
Last week the pair continued to fluctuate heavily amid the mixed sentiment in the market with investors growing pessimistic with the downbeat U.S. data and also cautious over the euro with the speculation over the outlook for Greece.
Debt-laden nations continue to suffer in the euro area and the Greek tragedy is still the center of attention. While for the United States, the slowing pace of recovery is agonizing the dollar as the Feds pledge to keep rates lower while also threatening the market sentiment that continued to trade on thin air!
This week growth is likely to be the predominant sentiment with investors wary over the slowing signs of the recovery. We have GDP revision for the first quarter from both Germany and the United States which will determine the sentiment over growth and accordingly monetary policy.
Other news from the euro area and the U.S. economy to affect the pair this week:
Monday May 23:
The start of the week will be with euro area’s sectors performance in May as investors are downbeat already over the outlook for the slowing global recovery. Germany will start with the Flash PMI estimates for May at 07:30 GMT. The manufacturing PMI might have slowed to 62.3 from 62.9 and the Services might have eased to 61.3 from 62.0.
The euro area Flash PMI May estimates are due at 08:00 GMT the Manufacturing is expected to slow to 57.6 from 58.0 and Services also slower to 56.6 from 56.7.
Tuesday May 24:
The start is at 06:00 GMT with the final revision for the German first quarter GDP which is likely unrevised at its strong 1.5% expansion. Also Germany’s IFO business survey will be watched at 08:00 GMT where the drop in confidence seen lately is still ongoing due to the uncertain outlook, debt woes in the euro area, and rising inflation and commodity prices which are pressuring the sentiment.
The euro area’s industrial orders for March are due at 09:00 GMT are marginally expected to affect the currency following the early news, and especially as we already saw factory orders drop heavily on the month and likely the same will be seen.
At 14:00 GMT, the U.S. will release the new home sales index for the month of April, where new home sales are expected to rise by 1.7% to an annual rate of 305,000 units, compared with the prior estimate of 300,000 units, although the housing market showed further weakness in April, as the housing market remains depressed.
Wednesday May 25:
German Gfk confidence is due at 06:00 GMT for the month of June and might have eased from May’s 5.7.
At 12:30 GMT, the U.S. will release the durable goods orders for the month of April, where durable goods orders are expected to drop by 2.0%, compared with the prior rise of 2.5%, while durable goods excluding transportation are expected to rise by 0.6%, compared with the prior rise in March by 1.3%.
Meanwhile, at 14:00 GMT, the U.S. will release the house price index for the month of March, where house prices are expected to fall by 0.5%, compared with the prior drop of 1.6%.
Thursday May 26:
We do not have any major fundamentals from the euro area on Thursday, yet Trichet is scheduled to speak on the economy at 09:20 and any hints on the outlook for growth, inflation, and monetary policy might affect the euro.
The focus will be at 12:30 GMT and the U.S. second estimate for Gross Domestic Product index for the first quarter of 2011. The economy is expected to have expanded by 2.2%, compared with the prior estimate of 1.8%, while personal consumption is expected to rise by 2.8%, compared with the prior rise of 2.7%. The GDP price index is expected to remain unchanged at 1.9% in the first quarter, while core PCE is also expected to remain unchanged at 1.5% during the first quarter of 2011.
At the same time the jobless claims for the week ending May 21, will be released, where jobless claims dropped last week to 409,000, while continuing claims also fell to 3.711 million.
Friday May 27:
The week will end with German CPI and retail sales which might add to the euro’s volatility at the end of the week. The euro area will report the M3 Money Supply at 08:00 GMT which might not affect the pair much yet the European Commission’s confidence survey for May due at 09:00 GMT will affect the euro. Confidence across sectors might have slowed further with rising uncertainty over the outlook amid rising inflation and fiscal challenges which might pressure the euro to the downside.
The income report will be released for the month of April at 12:30 GMT, where personal income is expected to rise by 0.4% in April, compared with the prior rise of 0.5%, while personal spending is expected to rise by 0.4%, compared with the prior rise of 0.6%. The income report is also expected to show that core PCE rose in April by 0.2%, compared with 0.1% reported in March, while compared with a year earlier, core PCE is expected to rise by 1.0%, compared with the prior rise of 0.9%, and the PCE deflator is expected to rise by an annualized 2.1%, compared with the prior rise of 1.8%.
At 13:55 GMT, the University of Michigan will release the final estimate for consumer confidence in May, where consumer confidence is expected to remain unchanged at 72.4 in line with the prior estimate. While the last awaited for the week will be at 14:00 GMT with the pending home sales index for April, where pending home sales are expected to drop by 1.0% in April, compared with the prior rise of 5.1% reported in March.
Originally posted here
Read more about forex technical analysis, forex fundamental analysis and forex news on ForexMansion.com
About ForexMansion.com:
www.ForexMansion.com is a part of the Finance Mansion Network which operates global financial websites. Our goal is to provide our readers with the most accurate, quality and up-to-date technical analysis, fundamental analysis and news in order to assist them in making the right financial decisions.
The Finance Mansion Network includes www.FinanceMansion.com,www.ForexMansion.com, www.StocksMansion.com, www.CommoditiesMansion.com and many more.
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