Manufacturing keeps the bearish trend, heading towards contraction in Europe

Daily Briefing, June 21 – Series of European PMIs & Canadian Retail Sales on the Cards

Posted Friday, June 21, 2019 by
Arslan Butt • 2 min read

On Friday, the dollar fought to get on the front foot and is heading for a weekly loss against peers of major currencies after the US Federal Reserve joined global peers with plans to cut interest rates to support flagging economic growth. Later today, the market awaits a series of manufacturing and non-manufacturing events from the Eurozone. The Canadian dollar can also offer an excellent trade opportunity on the release of retail sales data.

EUR/USD – It’s All About Manufacturing & Services PMIs Today

The EUR/USD currency pair surged over 100 pips in the wake of a weaker dollar. The single currency Euro is steady as the traders turn cautious ahead of the flash manufacturing and services PMI releases from across the Euro area economies.

Crumbling Eurozone economy continues to remain the central concern for the global markets amid continuing Brexit uncertainty. EUR/USD is gaining support above $1.1281, the previous resistance level. The new 4-hour candle close is a doji candle, which signifies a neutral sentiment among investors.

So we can expect EUR/USD to continue trading higher until $1.1285, while the support remains around $1.1280 and $1.1240 area

Potential Economic Events to Impact

The European economy is due to release a series of economic events which include:

French Flash Manufacturing PMI – The number is scheduled at 7:15 GMT with a forecast of 51.6 vs. 51.5 beforehand. It may extend slight support to euro pairs.

French Flash Services PMI – The services PMI will be released along with the Flash Manufacturing numbers. It’s expected to show a slight surge from 50.6 to 51.0 in June.

German Flash Manufacturing PMI – The German PMI is usually published 15 minutes after the French PMI. Therefore, these figures are due at 7:30 GMT. It’s forecast to rise from 44.3 to 44.6.

German Flash Services PMI – It’s scheduled with a forecast of 55.3, slightly below the previous month’s figure of 55.4.

Daily Technical Levels

Support Resistance
1.1264 1.1321
1.1233 1.1348
1.1176 1.1405
Key Trading Level: 1.1291

EUR/USD – Trade Plan

The idea is to stay bearish below $1.1291 with a stop loss above $1.1320 and take profit at $1.1233 and $ 1.1176.

USD/CAD – Trading the Retail Sales

The Loonie remains under the spotlight due to the upcoming Canadian retail sales figures.

Core Retail Sales m/m – The figure shows a change in the total value of sales at the retail level, excluding automobiles. A higher number of retail sales signals growth in the economy.

Statistics Canada is due to release the figure at 12:30 GMT with a negative forecast of 0.6% vs. 1.7% previously.

USD/CAD trades bearish around $1.3160 but in the oversold zone. It’s been gaining support around $1.3150, extended by the horizontal trendline, while resistance prevails at $1.3220 (23.6% Fibo Level) and 1.3260 ($38.2% Fibo Level). It’s better to enter the market on a breakout.

Daily Technical Levels

Support Resistance
1.3147 1.324
1.3102 1.3288
1.3009 1.3381
Key Trading Level: 1.3195

USD/CAD – Trade Plan

I’m looking to open a buy position above $1.3195 with a stop loss below $1.3147 and take profit of $1.3288. Let’s see how retail sales plays the market.

Stay tuned to FX Leaders for more updates!

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