Forex Market: EUR/USD daily forecast

May 8, 2014 7:29 am

During yesterday’s trading session EUR/USD traded within the range of 1.3909-1.3939 and closed at 1.3910.

At 7:24 GMT today EUR/USD was adding 0.11% for the day to trade at 1.3925. The pair touched a daily high at 1.3927 at 7:20 GMT.

Fundamental view

Euro zone

At 11:45 GMT the European Central Bank will announce its decision on borrowing costs. The benchmark interest rate will probably be left unchanged at 0.25% at the policy meeting, according to the median estimate by experts. However, the recent strength of the euro is increasing pressure on central bank’s policy makers to take action, because the strong currency keeps inflation depressed. A cut in rates would have a bearish effect on the 18-nation common currency.

The decision on policy will be followed by a press conference with ECB President Mario Draghi, scheduled at 12:30 GMT. Market volatility during this event is usually high.

United States

The initial jobless claims in the US probably fell to 325 000 in the week ended May 3rd, from 344 000 a week ago, according to the median estimate by experts. The indicator measures the number of applications for unemployment benefits that are recorded each week in a report prepared by the Bureau of Labor Statistics in the United States. Initial application or (Initial Claim) means a completed document from an unemployed person before the local government, which is considered a claim for compensation or the possibility of compensation. The completion of the initial claim marks the beginning of a period in which the applicant receives unemployment benefits. The survey covers the number of applications registered in the previous week and is an important indicator concerning the health of the US labor market.

The data is due to be released at 12:30 GMT. In case initial jobless claims drop more than expected, this will heighten the appeal of the greenback.

Technical view

Screenshot from 2014-05-08 10:28:45

According to Binary Tribune’s daily analysis, in case EUR/USD manages to breach the first resistance level at 1.3930, it will probably continue up to test 1.3949. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3960.

If EUR/USD manages to breach the first key support at 1.3900, it will probably continue to slide and test 1.3889. With this second key support broken, the movement to the downside will probably continue to 1.3870.

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