EUR/USD Weekly Fundamental Analysis – May 2-6, 2016 – Forecast

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Published: Apr 30, 2016, 10:56 UTC

The EUR/USD soared this week aided by a jump in GDP and a weaker US dollar to end at 1.1454 showing a gain this week of 1.96%. The greenback plunged the

The EUR/USD soared this week aided by a jump in GDP and a weaker US dollar to end at 1.1454 showing a gain this week of 1.96%. The greenback plunged the most this week since 2008 after economic reports trailed forecasts, damping the outlook for growth as Federal Reserve policy makers await evidence needed to justify more interest-rate increases. The U.S. currency has eroded more than half its 9 percent surge last year, with one measure of dollar momentum approaching a level that indicates to some analysts that it is oversold and set to reverse direction.

Seasonally adjusted GDP rose by 0.6% in the euro area (EA19) and by 0.5% in the EU28 during the first quarter of 2016, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union. In the fourth quarter of 2015, GDP grew by 0.3% in the euro area and by 0.4% in the EU28.

“There is no question that the Eurozone is now benefiting from the very easy monetary policy provided by the European Central Bank and that fiscal conditions are more benign now than at any time since before 2011,” said George Magnus, senior adviser at UBS. “We’ve had five years of austerity. The fiscal stance is now slightly simulative at the margin.” (Financial Times)

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:

Time	Cur.	Event	Actual	Forecast	Previous
Sunday, May 1, 2016
	CNY	Manufacturing PMI (Apr)		50.4	50.2
Monday, May 2, 2016
		United Kingdom – Early May Bank Holiday
		China – Labor Day
	CNY	Caixin Manufacturing PMI (Apr)			49.7
	EUR	German Manufacturing PMI (Apr)		51.9	51.9
	USD	ISM Manufacturing PMI (Apr)		51.5	51.8
Tuesday, May 3, 2016
		Japan – Constitution Day
	CNY	Caixin Manufacturing PMI (Apr)		49.9	49.7
	AUD	Interest Rate Decision (May)		2.00%	2.00%
	GBP	Manufacturing PMI (Apr)		51.2	51.0
Wednesday, May 4, 2016
		Japan – Greenery Day
	NZD	Employment Change (QoQ) (Q1)			0.9%
	GBP	Construction PMI (Apr)		54.0	54.2
	USD	ADP Nonfarm Employment Change (Apr)		200K	200K
	USD	ISM Non-Manufacturing PMI (Apr)		54.6	54.5
	USD	Crude Oil Inventories			1.999M
Thursday, May 5, 2016
		Japan – Children’s Day
	AUD	Retail Sales (MoM) (Mar)		0.3%
	GBP	Services PMI (Apr)		53.5	53.7
Friday, May 6, 2016
	USD	Nonfarm Payrolls (Apr)		200K	215K
	USD	Unemployment Rate (Apr)		5.0%	5.0%
	CAD	Employment Change (Apr)		-1.5K	40.6K
	CAD	Ivey PMI (Apr)			50.1