Headlines the Economic Calendar on Monday
Eurozone Manufacturing PMI to be announced today which is expected to ease slightly to 57.2 in July from 57.4 compared to a month ago while service PMI is expected to slightly increase to 55.5 from 55.4 according to preliminary numbers. In line with or better than expectations will point to the recovery in the European economy. This may support EUR/USD which is trading above the major level of 1.1630.
US Manufacturing and Service PMI will also be announced in the US. Manufacturing index level stood at 52.0 in June and is expected to rise to 52.1 in July while service PMI is also expected to slightly ease to 54.2 from 54.1 a month ago. Data better than expectations may lead to some increase in DXY.
Among data releases in U.S, Existing Home Sales will be released today. It measures monthly sales of previously owned single-family homes and is expected to fall by 0.8% m/m in July. The contraction was 1.1% a month ago. Though it is a second tier data in terms of predictive power, it would be considered negative for the US, positive for EM in case it posts a weak performance as indicated by consensus estimate.
Technical Analysis
EUR/USD - The EUR/USD pair rose significantly and closed last week above the 1.1630 key support level and If the price is able to sustain above 1.1630 on a daily basis, the bullish action may gain more momentum. In this case, the resistance levels will be at 1.1665 and 1.1740, On the other hand, if the price drops below 1.1630 again, the next support level will be at 1.1540.
Support: 1.1630 – 1.1540 – 1.1445
Resistance: 1.1665 – 1.1740 – 1.1810
Gold - The Bullish action has been behind the Gold for two weeks. The yellow metal hit the key resistance level of 1255. In order for the rise to gain more momentum, it needs to go beyond 1255 and remains above that level. In this case, the next resistance level will be at 1273. Otherwise, we might see a profit taking action below 1255 and we will face again support levels at 1236 and 1226.
Support: 1236 – 1226 –1210
Resistance: 1255 – 1273 – 1286
GBP/USD - The GBP/USD pair showed a bearish action last week. In the event that the downward movement continues, we will face 1.2985 and 1.2860 as support levels. However, as long as the price remains above the daily support level of 1.2860, the bearish action may be limited. On the other hand, if the pair shows an upward move, we will follow resistance levels at 1.3050 and 1.3120.
Support: 1.2985 – 1.2860 – 1.2775
Resistance : 1.3050 – 1.3120 – 1.3185
USD/JPY - The USD/JPY currency has been falling for two weeks and the price closed last week below the 111.90 daily resistance level. If the price remains below that level on a daily basis, the bearish action may gain momentum. At this point, we will watch 110.50 and 109.75 as support levels. Although, if the pair goes beyond 111.90 again, the next resistance level will be at 112.75.
Support: 110.50 – 109.75 – 109.75
Resistance : 111.90 – 112.75 – 113.60
Crude Oil WTI - The U.S Oil price hit the key resistance level of 47.15 and then pulled back. In order for the price to gain more value again, it needs to rise and remains above the 45.95 major level, on a daily basis. At this point, the next resistance level will be at 47.15. Otherwise, the pullbacks may continue and we will face 45.25 and 44.30 as support levels.
Support: 45.25 – 44.30 – 43.65
Resistance: 49.95 – 47.15 – 48.15