EUR/USD Weekly Fundamental Analysis – February 15-19, 2016 -Forecast

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Published: Feb 13, 2016, 07:15 UTC

Weekly Analysis and Recommendation: The EUR/USD rocked over 1.13 to end the week at 1.1255 seeing a weekly gain of 0.86% after the US dollar took a hit on

Weekly Analysis and Recommendation:

The EUR/USD rocked over 1.13 to end the week at 1.1255 seeing a weekly gain of 0.86% after the US dollar took a hit on testimony from Janet Yellen to US lawmakers. Given recent commentary from Fed officials, including from Fed Chair Janet Yellen at her two testimonies this week, the US Dollar needs its highest-rated economic data to start to turn here in order for future rate expectations to firm up; currently, zero rate hikes are being priced in over the next year, per the Fed Futures contract. In fact, markets now think there is a greater chance of a rate cut than a rate hike at the March FOMC meeting.

This week traders are closely monitoring economic data after the Janet Yellen’s testimony. Any surprises out of upcoming US CPI inflation figures or the release of minutes from the US Federal Reserve’s January policy meeting could thus force important swings in US Dollar pairs. The Fed famously ended its zero interest rate policy at its December meeting and decided to keep rates on hold when it met through late January. In keeping rates unchanged, the FOMC statement showed officials feared sudden financial market turmoil could hurt growth prospects. Fed Chair Yellen spoke to such fears in her testimony to the US Legislature. Yet it will be important to see the extent to which the broader Federal Open Market Committee fears such risks. Any especially dovish commentary could force further US Dollar losses.

Italian Prime Minister Matteo Renzi believes talk of creating a new finance “super-minister” for the Eurozone is less important than correcting the EU’s economic policies, which he contrasted unfavorably with the pro-growth U.S. approach.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week:

	Cur.	Event	Actual	Forecast	Previous
Monday, February 15, 2016
		United States – Presidents’ Day
		Canada – Family Day
	CNY	Trade Balance (Jan)		58.85B	60.09B
Tuesday, February 16, 2016
	GBP	CPI (YoY) (Jan)		0.3%	0.2%
	EUR	German ZEW Economic		3.2	10.2
Wednesday, February 17, 2016
	GBP	Average Earnings Index		1.9%	2.0%
	GBP	Claimant Count Change (Jan)		-3.0K	-4.3K
	USD	Building Permits (Jan)		1.200M	1.204M
	USD	PPI (MoM) (Jan)		-0.2%	-0.2%
Thursday, February 18, 2016
	AUD	Employment Change (Jan)		15.0K	-1.0K
	CNY	CPI (YoY) (Jan)		1.9%	1.6%
	USD	Philadelphia Fed		-2.8	-3.5
	USD	Crude Oil Inventories			-0.754M
Friday, February 19, 2016
	GBP	Retail Sales (MoM) (Jan)		0.8%	-1.0%
	USD	Core CPI (MoM) (Jan)		0.2%	0.1%
	CAD	Core CPI (MoM) (Jan)		0.2%	-0.4%
	CAD	Core Retail Sales (MoM) (Dec)		-0.5%	1.1%