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EURUSD - Weekly Outlook: May 13 - 17

Release Time:2019-05-13 02:40

EURUSD (1.1231) • Germany reported a wider than forecast Trade Balance for Mar amid a pick-up in exports (+1.5% M/M) which will support the impression that the German/Eurozone economy may be stabilizing. France reported stronger wage growth in Q1 but a disappointing 0.9% drop in Industrial Production data for Mar, however. Italian IP was also weaker than expected in the month. EURUSD advanced sharply and for little obvious reason mid-morning yesterday and remains better supported on the week. Cross currency basis has steadied but remains an apparent drag on the EUR’s performance, reflecting demand for USD funding. 

EURUSD short-term technicals: neutral – EURUSD is heading for a second, consecutive weekly gain, the first time the EUR has strung two weeks’ worth of gains together since February. Price action was constructive on friday, extending gains through noted resistance around 1.1225. We still think the key point – major resistance – for the EUR stands at 1.1345, weekly trend resistance, however, and intraday gains may struggle again in the mid-1.12s. Support is 1.1200/05 and 1.1175. 

EURUSD -- Remains within bear channel 

Resistance: 1.1265, May 1 high; 1.1331, March 25 high; 1.1401, 200-DMA 

Support: 1.1112, April 26 low; 1.1000, psychological level; 1.0864, 76.4% Fibonacci retracement of Jan. 3, 2017 low to Feb. 16, 2018 high