EUR/USD Fundamental Analysis October 27, 2014 Forecast

Analysis and Recommendations:

The EUR/USD gained 5 points to trade at 1.2652 but showed no conviction; there was little support by German Consumer data that printed a bit better than expected. The dollar will likely remain vulnerable to selling with investors moving to lock in profits, especially outside Japan, as they are sensitive to the risk of terrorism and Ebola and ahead of next week’s big events. The dollar will likely keep its uptrend intact next week, despite possible ups and downs after the FOMC decision.

The euro zone’s 130 biggest banks received the European Central Bank’s final verdict on their finances on Thursday after a review aimed at drawing a line under persistent doubts about the health of the region’s banking sector. They will not be made public until 1100 GMT on Sunday.

Generally investors are expecting few failures and surprises, especially amongst household names, but going into the weekend, most preferred to be cautious about the euro. ECB Vice President Vitor Constancio and Supervisory Board chair Daniele Nouy will hold a press conference to explain the results 30 minutes later. The Bloomberg Europe 500 Banks and Financial Services Index rose 0.6 percent today, two days before the announcement.

Some banks are already said to have failed, such as Permanent TSB Group Holdings Plc, Ireland’s smallest state-owned bank, which fell short in the ECB’s adverse stress test, a gauge of resilience over three years after a hypothetical recession and bond-market collapse. Permanent TSB, based in Dublin, passed the other two elements of the assessment, according to a person with knowledge of the matter.

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 up to the data analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Government Bond Auction

Date Time Country Auction

Oct 27 12:30 Germany Eur 2.0bn new 12M Bubill (Oct 2015) auction

Oct 27 18:30 Italy Announces details of BTP/CCTeu auctions on Oct 30

Oct 27 12:10 Italy BTPei/CTZ auctions

Oct 28 12:10 Italy BOT auction

Oct 28 19:00 US 2Y Note auction

Oct 29 12:03 Sweden Bond auction

Oct 29 12:30 Germany Eur 4.0bn Aug 2024 Bund auction

Oct 29 17:30 US 2Y FRN auction

Oct 29 19:00 US 5Y Note auction

Oct 30 12:10 Italy BTP/CCTeu auctions

Oct 30 19:00 US 7Y Note auction