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- Stock indices and EUR/USD under the spotlights next week 20.08 – 24.08.2018
Stock indices and EUR/USD under the spotlights next week 20.08 - 24.08.2018
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Loading...In the new week, all eyes will be again on Donald Trump and his administration. New hopes have emerged, that new negotiations and a settlement of the US-China trade dispute would soon be reached. This, combined with strong corporate reporting, provides the necessary support for US indices and expectations for new highs. US National Economic Adviser Larry Kudlow confirmed that China and the US will hold a new round of talks later in August (the exact date has not yet been selected).
EUR/USD made an important move over the past week, indicating that the dollar remains the preferred currency over the euro. The most traded pair fell to the 12-month low of 1.1380. Although the price is currently higher, we have a breakthrough under consolidation support that lasts for 2.5 months and the bears still control the market (unless the price rises again in the consolidation). The downward movement correlates with the rise in the greenback index, which touched a new 13-month high. Like the currency pair, DXY has been consolidating since the end of May and has broken up at the end of last week. EUR / USD has met the expectations of traders, for the time being observing their technical formation. On Tuesday, we witnessed the formation of an engulfing, trend-confirming bar on daily chart, which indicates that bulls' headaches have not yet come to an end.
In my opinion, the 2.5-month consolidation will resume, with the price going back into the range. To continue the long-term downward movement, there are no successive large bear bars. And there's a price action signal for long. For this reason, it is more likely that the 2-month consolidation will continue, not to see a renewal of the May bear trend.
Even after the breakthrough of consolidation and the movement of nearly 250 pips, a trading range late in bearish trend is usually the last flag for bears. For this reason, traders will expect to reverse the move back to consolidation next month.
The important economic news for the new week 20.08 - 24.08.2018
Monday:
09:00 Germany - PPI
18:00 USA - FOMC Member Bostic Speaks
Tuesday:
04:30 Australia - RBA Meeting Minutes
Wednesday:
01:45 New Zealand - Retail Sales
15:30 Canada - Core Retail Sales
17:00 USA - Existing Home Sales
17:30 USA - Crude Oil Inventories
21:00 USA - FOMC Meeting Minutes
Thursday:
10:30 Germany - Manufacturing PMI
14:30 Europe - ECB's Account of Monetary Policy Meeting
15:30 USA - Initial Jobless Claims
17:00 USA - New Home Sales
Friday:
01:45 New Zealand - Trade Balance
02:30 Japan - National CPI
09:00 Germany - Gross Domestic Product
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