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A dovish ECB and lockdowns in the eurozone weighed on the euro last week. Can the bulls improve their game this week?

Here are the potential catalysts you need to watch if you’re trading the common currency in the next couple of days:

Lower-tier economic releases

  • Germany’s factory orders (Nov 5, 7:00 am GMT) to slow down from 4.5% to 1.5% in September?
  • Eurozone retail sales (Nov 5, 10:00 am GMT) to see a 1.4% dip, weaken from 3.7% to 2.5% in annual readings
  • Germany’s industrial production (Nov 6, 7:00 am GMT) could jump by 2.5% (from -0.2%) in September
  • European Commission’s quarterly economic forecasts (Nov 5, London session) could mirror the European Central Bank (ECB)’s concerns over pandemic-related economic weaknesses

Overall euro demand

  • Now that France and Germany have announced their lockdown plans and the ECB has shared its plans to ease policies in December, a lot of EUR’s potential downside catalysts are already priced in
  • Unless we see more market-moving (read: lockdown-related) headlines from the eurozone, traders will likely trade the euro as a countercurrency to currencies with bigger catalysts
  • EUR/USD, in particular, could take its cues from the U.S. election results
  • As a low key “safe-haven” in the eurozone, EUR could present risk sentiment plays against the comdolls
  • Policy announcements from the Reserve Bank of Australia (RBA), Bank of England (BOE), and the Fed can inspire intraday volatility among major EUR pairs

CHF’s potential catalysts

  • Switzerland is printing its CPI and consumer climate reports, but franc traders will likely use CHF as a safe-haven this week
  • Look out for USD/JPY and EUR/USD volatility translating to volatile moves for USD/CHF and EUR/CHF
  • AUD/CHF, CAD/CHF, and NZD/CHF are currency pairs to watch in case risk aversion takes its toll on the high-yielding comdolls

Technical snapshot

  • The euro lost value against all but the Aussie in the last 30 days
  • EUR weakened the most against the safe havens and lost the least value to the comdolls
EUR Forex Pairs Performance from MarketMilk
EUR Forex Pairs Performance from MarketMilk
  • Stochastic is flagging EUR’s “oversold” conditions against NZD, JPY, GBP, USD, and CHF on the daily time frame
  • EUR/AUD remains in the neutral zone
EUR Forex Pairs Stochastic from MarketMilk
EUR Forex Pairs Stochastic from MarketMilk
  • CHF gained ground against the comdolls and the euro in the last seven days
  • CHF lost value against the safe havens and the pound
CHF Forex Pairs Performance from MarketMilk
CHF Forex Pairs Performance from MarketMilk
  • Stochastic considers the franc “overbought” against the euro
  • CHF may be “oversold” against the dollar and yen on the daily time frame
CHF Forex Pairs Stochastic from MarketMilk
CHF Forex Pairs Stochastic from MarketMilk