It seems that our thoughts were correct about the European currency. It is trading at critical levels. If it breaks below 1.22 that means it might reach below 1.20 by the end of this year, only a few days away. This might be an opportunity for Forex traders to take advantage of the political issues in Greece, in addition to a strong USD.
The Federal Reserve kept their signals very strong towards hiking interest rates next year, which is a significant support for the USD. Most of the major currencies traded weaker against the USD and the impact of such an event might continue till the end of this week. We are about to enter the holiday season and will most likely witness volatile markets as traders close their transactions to enjoy a quiet holiday.
The EUR/USD is most likely to find (R) Resistance & (S) Support at the levels mentioned below:
S2 S1 Pivot Point R1 R2
1.2094 1.2160 1.2250 1.2300 1.2353
We have a couple of financial releases today. We start with Europe, particularly Germany, with the Exports free on board (f.o.b.) and Imports cost insurance freight (c.i.f.) announcements which are, customs statistics reported under the general trade statistics according to the recommendations of the UN International Trade Statistics. For some countries Imports are reported as f.o.b. instead of c.i.f. which is generally accepted. When reporting Imports as f.o.b. you will have the effect of reducing the value of Imports by the amount of the cost of insurance and freight.
- Forecast:-1.8%
- Previous:-1.2%
And moving forward to the U.S. we have the major, Existing Home Sales release, this measures the change in the annualized number of existing residential buildings that were sold during the previous month. This report helps to gauge the strength of the U.S. housing market and is a key indicator of overall economic strength.
- Forecast:5.19M
- Previous:5.26M
A higher than expected reading should be taken as positive for the USD, while a lower than expected reading should be taken as negative for the USD.
And finally from New Zealand comes The Trade Balance announcement, this measures the difference in value between imported and exported goods and services over a reported period. A positive number indicates that more goods and services were exported than imported.
- Forecast:-800M
- Previous:-110M
A higher than expected reading should be taken as positive for the NZD/USD, while a lower than expected reading should be taken as negative for the NZD.
Disclosure: The prices and news mentioned in this outlook are absolutely no guarantee of future market performance.
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