Fundamental Outlook
Retail sales in the U.S. are expected to accelerate at the fastest pace in four months, according to the median estimate of 65 economists surveyed by Bloomberg News. Sales are forecasted to rise 1.2% after climbing 0.3% in February, while a separate report is surveyed to show that annualized consumer prices in the U.S. to jump 2.4% in March, following the previous month advance of 2.1%. Sales may actually exceed economists’ expectations as employers in the U.S. created most jobs in March than any other time in the past three years. Indeed, the unemployment rate remained unchanged at 9.7%, and looking ahead, the central bank forecasts the rate to fall to 9.6% by the end of the year and decline to 8.35% in 2011. It is noteworthy that consumer credit in February fell the most in three months, with the reading declining to $11.5 billion, signaling that Americans are less reluctant to take on further debt until they have complete certainty in the labor market, and indicating that we may not see that credit-fueled spending that the region displayed the previous year. Trading the event may lead to some mix reactions as the inflation report is expected to be released during the same time, causing the EUR/USD to tests its current range.
Technical Outlook
EUR/USD: It is a bit too early to say whether this slight upside break is the end of wave five as a pull back to 1.3510 seems likely as our speculative sentiment index signals for further losses in the pair. Key levels to keep an eye on for in the next couple days will be pivot support at 1.3438 and pivot resistance at 1.3772.
For More Technical Analysis Visit the DailyFX Technical Page
Written by Michael Wright, Daily FX Research
Questions? Comments? Email me at mwright@fxcm.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
