Inflation in the euro area remains low, reflecting the poor economic conditions in the euro area. The overall CPI fell 0.3%, while the core CPI gained 0.2%. Both figures confirmed the initial readings. The eurozone’s current account surplus jumped to € 25.2 billion from € 18.1 billion. It was the biggest surplus since March.
In the United States, the Empire State’s manufacturing index fell from 10.5 to 6.3 as the rate of expansion slowed for a second consecutive month. The Philly Fed’s manufacturing index fell to 26.3 from 32.3 points. Retail sales fell sharply in October, weighing on the US dollar. Overall retail sales fell from 1.9% to 0.3%. It was the lowest gain since April. The kernel reading slowed to 0.2%, down from 1.5% previously.
EUR / USD daily chart with support and resistance lines. Click to enlarge:
- PMI: Monday, 7.15 a.m. in France, 7.30 a.m. in Germany and 8 a.m. for the entire euro area. German and Eurozone manufacturing PMIs continue to point to expansion, with readings above the neutral level of 50. However, October readings are expected to drop. The estimates are 56.0 for Germany, 53.2 for the euro area and 50.2 for France. The service sector is in contraction and October numbers are expected to decline further. Forecasts for Germany are 46.1, for the euro area 42.2 and for France 39.2.
- German final GDP: Tuesday, 10:00 a.m. After falling -9.7% in Q2, analysts expect the German economy to rebound in Q3, with an estimate of 8.2%.
- German Ifo business climate: Tuesday, 12:00 p.m. Business confidence remains high, but is losing ground. The indicator slowed from 93.4 to 92.7 in October and is expected to drop to 90.5 in November.
- German consumer climate GfK: Thursday, 10 a.m. The German consumer remains pessimistic about economic conditions, and this is reflected in the indicator, which has recorded six consecutive declines. Another drop is forecast for November, with an indication of -4.9 points.
- Monetary data: Thursday, 12 noon. M3 money supply reached an annual growth rate of 10.4%, compared to 9.5% previously. Private loans edged up to 3.1% in August y / y. Money supply is expected to remain at 10.4% and we are awaiting data on private lending.
- Accounts of the ECB’s monetary policy meetings: Thursday, 3:00 p.m. The ECB will publish the minutes of its October political meeting. Investors will be looking for clues as to whether the ECB is planning further easing before the end of the year.
- French GDP: Friday, 10:45 a.m. The second largest economy in the eurozone has been hit hard by Covid-19, with GDP plunging 13.8%. Analysts expect a strong rebound in the third quarter, with a forecast of 18.2%.
EUR / USD technical analysis
Technical lines from top to bottom:
We are starting with resistance at 1.2136.
1.2046 is an important monthly resistance line.
1.1936 is next.
1.1877 is an immediate resistance line.
1.1744 is the first line of support.
1.1648 is as follows.
1.1573 (mentioned last week) has been providing support since July.
I am bearish on EUR / USD
The US dollar has been under pressure lately, but the US economy continues to outperform the eurozone, so investors may change their minds and show some love for the greenback this week.
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