EUR/USD Fundamental Analysis October 6, 2014 Forecast

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Updated: Aug 24, 2015, 22:00 UTC

Analysis and Recommendations: The EUR/USD continued to tumble to trade at 1.2622 giving up 47 points after services PMI for most individual countries

EUR/USD Fundamental Analysis October 6, 2014 Forecast

EUR/USD Fundamental Analysis October 7, 2014 Forecast

Analysis and Recommendations:

The EUR/USD continued to tumble to trade at 1.2622 giving up 47 points after services PMI for most individual countries except Germany missed expectations. There was very little response after retail sales beat forecasts. Mr Draghi avoided painting himself into a corner; traders sensed a significant level of concern yesterday about the outlook for activity and inflation. Many think that downside surprises in the next couple of months could prompt further ECB initiatives sooner than the market might now expect.

There wasn’t any marked change in the ECB’s assessment of the economic outlook from a month ago, but recent data were judged to ‘confirm the weakening in the euro area’s growth momentum while remaining consistent with a modest economic expansion in the second half of the year’. Notwithstanding its recent and impending measures, the ECB continues to see risks remaining to the downside.

Mr Draghi was very careful in the language he used in response to a number of questions on the exchange rate. However, the ECB’S preference for a weaker currency was probably stated as clearly as could be expected from a major central bank.

Today, the focus will be on the US payrolls report, but also the US non-manufacturing ISM, US trade balance, euro zone retail sales and (final) euro zone services PMI will be released. The ECB will announce the amount of LTRO repayments.

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:

Cur.	Event	Actual	Forecast	Previous
AUD	HIA New Home Sales	3.3%		-5.7%
CNY	Non-Manufacturing PMI	54.0		54.4
EUR	Spanish Services PMI	55.8	57.1	58.1
EUR	Italian Services PMI	48.8	49.6	49.8
EUR	French Services PMI	48.4	49.4	49.4
EUR	German Services PMI	55.7	55.4	55.4
EUR	Services PMI (Sep)	52.4	52.8	52.8
GBP	Services PMI (Sep)	58.7	59.1	60.5
EUR	Retail Sales (MoM)	1.2%	0.1%	-0.4%
USD	Nonfarm Payrolls (Sep)		215K	142K
USD	Private Nonfarm		210K	134K
USD	Trade Balance (Aug)		-40.90B	-40.60B
USD	Unemployment Rate		6.1%	6.1%