EUR/USD: outlook for August 10-16
The dynamics of EUR/USD in the recent days was rather chaotic. The euro fluctuated around 1.0900. As the situation in Greece has stabilized for a time being, traders focused on the US.
Still, there are some news from Europe as well. Germany’s industrial production and exports both slumped unexpectedly in June, a sign that growth in Europe’s largest economy failed to gather much momentum in Q2. Yet, we are not pessimistic about German economic prospects as manufacturing orders and business sentiment were OK. Germany’s trade surplus is still near May’s record high which indicates good foreign demand.Greece is no longer at the spotlight, but things are still happening there. We witnessed great volatility of Greece bank stocks: during the past week, they fell by more than 60% before recovering by about 20%. Greece is continuing talks with creditors about the 85-billion-euro bailout. The nation hopes to reach a deal by August 20 when it will need money to pay back the ECB. According to Greek Prime Minister Tsipras, the talks are now at the final stage. Yet, Germany’s Finance Ministry favors a bridge loan for Greece, so that Athens could avoid default, but spend more time to negotiate a 3-year credit program.Next week pay attention to German ZEW economic sentiment index on Tuesday and Germany’s and the euro area’s flash Q2 GDP on Friday. All in all, we still think that data and news from the United States will be a priority for the market. Good NFP will likely keep the pair under pressure. Strong support for EUR/USD is at 1.0800, other levels include 1.0750 and 1.0700. Resistance is at 1.0970, 1.1000/30 и 1.1100.