EUR/USD Forecast Jan. 7-11 – Volatility Doesn’t Do It Any Good

EUR/USD was on the back foot as the US Dollar stormed the board amid growing worries. The ECB Meeting Minutes stand out in the first full week of 2019. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Apple sparked a flash crash by issuing a revenue warning and blaming a Chinese slowdown. It came on top of weak Chinese PMI’s and stock markets jitters. While the euro did not suffer the same fate of the Aussie, it certainly stumbled. Mediocre euro-zone PMI’s and fears of an Italian recession did not help.

EUR/USD daily chart with support and resistance lines on it. Click to enlarge:

  1. German Factory Orders: Monday, 7:00. Germany is considered the “locomotive” of the euro-zone. Its factory orders are recovering with an increase of 0.3% in October. Will we see another improvement in November?
  2. Sentix Investor Confidence: Monday, 9:30. The 2,800- strong survey of analysts and investors fell sharply in December to -0.3 points, thus reflecting pessimism for the first time in four years. Another downfall within negative territory cannot be ruled out.
  3. Retail Sales: Monday, 10:00. Despite coming out after the German and French data will have been released, the overall figure can surprise. A modest increase of 0.3% was seen in October.
  4. German Industrial Production: Tuesday, 7:00. Contrary to factory orders, industrial output dropped by 0.5% in October, falling short of expectations. We could see an increase in the report for November.
  5. French Trade Balance: Tuesday, 7:45. The euro zone’s second-largest economy has a chronic trade deficit. However, the deficit narrowed to 4.1 billion euros back in October. It may widen again this time.
  6. German Trade Balance: Wednesday, 7:00. Germany continues enjoying a broad trade surplus, but it has been shrinking from data seen in previous years. The figure stood at 17.3 billion in October and November will probably see a similar number.
  7. Unemployment Rate: Wednesday, 10:00. After a persistent fall, the jobless rate got stuck at 8.1% in the past three months as the euro-zone economies slowed down. A similar outcome is likely for the month of November.
  8. French Industrial Production: Friday, 7:45. The euro area’s second-largest economy enjoyed a substantial jump in its industrial output back in October: 1.2%. A slide could be seen in November.
  9. ECB Meeting Minutes: Thursday, 12:30. The European Central Bank concluded 2018 by ending the QE program, as expected. ECB President Mario Draghi was slightly cautious in his comments about the economy, expressing concern about protectionism but maintaining the expectations for a rate hike in 2019. The minutes will provide further detail.
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