A handful of medium-tier reports are due from the euro zone in the next session, so I’m looking out for a turnaround on this euro pair.
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- Japanese PM Abe says gov’t is ready to protect economy from coronavirus impact
- Schools in Japan and Tokyo Disneyland shut down on coronavirus concerns
- Japanese preliminary industrial production up 0.8% in January vs. 0.2% forecast
- Tokyo core CPI down from 0.7% to 0.5% vs. 0.6% estimate
- Japanese unemployment rate jumped from 2.2% to 2.4%
- Japan’s retail sales down 0.4% vs. projected 1.3% slump
- Australia’s private sector credit up 0.3% vs. 0.2% forecast
Upcoming Potential Catalysts on the Forex Calendar:
- German import prices at 7:00 am GMT
- U.K. Nationwide HPI at 7:00 am GMT
- German preliminary CPI at 7:00 am GMT
- Swiss retail sales at 7:30 am GMT
- French consumer spending, preliminary CPI and GDP at 7:45 am GMT
- Swiss KOF economic barometer at 8:00 am GMT
- German unemployment change at 8:55 am GMT
What to Watch: EUR/USD
Despite strong risk-off flows in the Asian session on account of the coronavirus outbreak, the euro still managed to surge against the Greenback.
These rallies could come to a halt if risk aversion persists in the London session, though, as investors continue to pay closer attention to cases and fatalities outside of mainland China.On top of that, potentially disappointing economic figures from the region might also spur profit-taking for EUR/USD. The pair is currently testing the 50% Fibonacci retracement level that lines up with a former support level at the 1.1000 major psychological mark.
Buyers seem to be exhausted as stochastic and Williams %R are showing overbought conditions while RSI and Bollinger Bands are approaching these levels as well.
If euro zone economic data disappoints, the pair could retreat by around the EUR/USD volatility of 49.2 pips. On the other hand, strong figures could lead to a move up to the next resistance at the 61.8% Fib.