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Improved sentiment in the European region kept EUR and CHF afloat despite a lack of major data releases last week. Will we see more directional price action this week?

Check out the market themes that can affect the common currency and the franc:

ECB’s meeting minutes (Aug 20, 12:30 pm GMT)

  • The European Central Bank (ECB) kept its interests and stimulus program unchanged last month
  • ECB Chairman Lagarde hinted that the central bank would keep its easy policy even as the economy recovers
  • No bombshells are expected from the ECB’s meeting minutes as members are on a wait-and-see mode after recently upping their stimulus packages

Eurozone PMIs

  • Switzerland’s trade surplus (Aug 20, 7:00 am GMT) to widen from 2.8B to 3.0B in July
  • Germany’s PPI (Aug 20, 7:00 am GMT) seen at 0.3% after 0.0% reading in June
  • France’s manufacturing and services PMI (Aug 21, 8:15 am GMT) to improve 2-3 points higher from last month’s reading
  • Germany’s manufacturing and services PMI (Aug 21, 8:30 am GMT) seen at 55.2 (from 51.0) and 55.0 (from 55.6) respectively
  • Eurozone’s manufacturing and services PMI (Aug 21, 9:00 am GMT) to reflect an improvement in manufacturing but a slight setback in services in August

Market sentiment

  • Risk-off flows tend to benefit the lower-yielding euro and franc, especially while the U.S. dollar is under downside pressure
  • Based on last week’s price action, EUR and CHF’s prices can react to headlines about the U.S. stimulus negotiations and economic activity amidst rising coronavirus cases around the world

Technical snapshot

  • RSI is flagging EUR’s overbought conditions against NZD and JPY
  • EUR/USD may soon hit overbought territory on the daily time frame
EUR Forex Pairs RSI from MarketMilk
EUR Forex Pairs RSI from MarketMilk
  • Daily SMAs show the euro’s short and long-term bullish trends against most of its counterparts
EUR Forex Pairs SMAs from MarketMilk
EUR Forex Pairs SMAs from MarketMilk
  • Stochastic considers the franc overbought against JPY and NZD
  • CHF may also reach overbought status against AUD and USD
  • CHF is approaching oversold territory against CAD on the daily time frame
CHF Forex Pairs Stochastic from MarketMilk
CHF Forex Pairs Stochastic from MarketMilk

Missed last week’s price action? Read EUR & CHF’s price recap for August 10 – 14!