A major factor in the decline of the euro is that the bearish mood of the dollar has reached an extreme level, and the correction of the dollar has put pressure on the euro/dollar. In addition, in the past few trading days, the euro has risen too sharply, the MACD is above the signal line indicating bullish, the RSI target is in the overbought area, and the euro/dollar may be undergoing a technical correction.
However, it is widely analyzed that even if the euro goes down, the bearish range is very limited, because now shopping malls are bearish on the dollar, and the negative factors of the dollar that caused the euro to rise by nearly 90 points some time ago have not disappeared, and even have a growing trend. Epidemic, global debt and unfettered printing of money are weakening people's confidence in the dollar as a global storage bank. In contrast, although the euro is also in danger, it also has many advantages.
This data is favorable for the euro.
Although the US ISM manufacturing index in July released on Monday climbed to a five-month high of 54.2 at 15, the sub-item work target was far below 50%, indicating that enterprises continued to lay off employees in July. The key data has once again aroused concerns about the US job market, making the oversold rebound of the US dollar unsustainable.
Eurodollar chart
In other data, the changes in the number of unemployed people in Spain and the producer price index in the euro zone will be released during the European session on Tuesday. North America will release the monthly rate of factory orders in the United States in June.
In addition, the data released by shopping center IHS Markit on Monday (August 3) showed that a number of PMI data in the euro zone recorded unexpected growth in July, suggesting that the euro zone economy is accelerating its recovery. However, the outbreak of the second epidemic and the tense global economic and trade situation have aggravated the uncertainty of the recovery prospects of the euro zone, and the demand must be cautious.
Manufacturing in the euro zone rebounded slightly.
According to IHS Markit data, the final value of manufacturing PMI in the euro zone is 0.7 to 5 1.8 higher than that in early July, mainly due to the revision of manufacturing PMI data in Germany and France. In the meantime, the final value of manufacturing PMI in Germany in that month was raised from the initial value of 50 to 51; In that month, the final PMI of French manufacturing industry was raised from the initial value of 52 to 52.4.
According to experts from IHS Markit, German manufacturing industry is on the track of recovery, and PMI finally entered the expansion range in July, hitting a high point since 20 18 and 12. Although enterprises are still laying off employees substantially and economic activities and demand are still at the pre-crisis level, the sharp increase in new orders in July has made the recent production prospects more philosophical.
Chris Williamson, chief economist of IHS Markit, commented that the factories in the euro zone started very positively in the third quarter, and the increase of new orders exceeded the output value, which indicates that the output value is expected to increase further in August.
But Williamson pointed out together that work is still the primary issue. According to the survey data, by July, enterprises in the euro zone had laid off employees for the fifth consecutive month. He said that the rising unemployment rate, the second wave of epidemic and continued social isolation will all have an impact on economic recovery.
The European economy has been hit hard and the recovery is facing multiple dangers.
Although the PMI data in July brought philosophical news to the economic recovery in the euro zone, the GDP data of the euro zone released on July 3 1 also made institutions cautious. According to the latest data released by Eurostat, the gross domestic product (GDP) of the European Union and the euro zone decreased by 1 1.9% and 12. 1% respectively in the second quarter of this year, down by 14.4% and15 respectively. This is the biggest economic downturn in the EU since 1995. Eurostat believes that this is because during the epidemic, EU member states adopted stricter epidemic prevention measures.
The data shows that among all the EU member States included in the calculation, Spain's GDP fell the most seriously in the second quarter of this year, with a drop of 18.5%. The 5.2% contraction in the first quarter erased all the recovery in the six years from 2008 to 20 13 after the Spanish financial crisis. In the second quarter of this year, France's GDP fell by 13.8%, and customer spending, trade and investment fell sharply, the worst performance since records began more than 70 years ago. Adding the two together, Italy's GDP in the second quarter decreased by 12.4% compared with the previous quarter, which is also the biggest decline since records began.
It is worth noting that Spain, France, Italy and other countries with weak economic performance hold a large number of debts due together. Once countries default on their debts, it will become a domino that will drag down the economic development of the euro zone and even make it fall apart.
At the same time, Europe is still facing the grim situation of epidemic rebound, and many countries have tightened epidemic prevention measures, which has weakened the expectations of shopping malls for rapid economic recovery in Europe. Although the European Commission said in the statement that after the constraints related to the epidemic were relaxed, the economic confidence in the euro zone rebounded more than expected in July, and the prosperity index of industry and service industry rose sharply, from the current situation, the European economic recovery faces multiple dangers, so it is necessary to avoid being too optimistic about the recovery prospects.
Europe's better response to the epidemic than the United States is one of the main reasons for the rise of the euro/dollar. Kit Juckes, chief foreign exchange strategist of Societe Generale, said in a statement that if the infection rate in the United States starts to slow down now, the concept that shopping centers will better reflect the European economy may be questioned.
Analyst: Non-agricultural data will affect the trend of the euro.
FXstreet analysts believe that the next trend of the euro/dollar will mainly depend on the elements of the dollar, especially the non-agricultural data of the United States.
"COVID-19 cases are increasing in all European countries-German, French, Italian and Spanish, and the situation in Spain is even more severe. Although the epidemic is under control, the recovery from the downturn in the tourist season and the second quarter can be sustained, thus supporting the euro. If the blockade plan is expanded, the euro may be under pressure. "
"The retail sales in June received attention. Consumption and the broader service industry have been hit harder than manufacturing, and investors expect the economy to continue to recover. "
"The virus is still the focus, and daily case data from Florida, California, Texas and the whole United States may continue to attract people's attention. Although it shows that the case curve begins to flatten, the rising death curve is more valued. "
"The negotiations between the Democratic Party and the * * * Party will last until the weekend, trying to reach an agreement on the next economic stimulus plan. The sooner the agreement is reached, the bigger the package will be, and the better it will be for the economy and the dollar. If the negotiations are blocked, millions of unemployed Americans will not get the government's rated help, which may lead to a decline in consumption, which will lead to a vicious circle of the economy. "
"Economists estimate that the entire non-agricultural sector in the United States will show that millions of jobs will be added or restored this month. However, in view of the increase of cases in COVID-19 since mid-June, the possibility of negative growth from non-agriculture cannot be ruled out. Layoffs mean that legislators may take more actions, but this is far from expected. In addition to the overall unemployment rate, the rise of the normative unemployment rate and the actual unemployment rate will also be closely watched. The actual unemployment rate also includes those who are too depressed to find a job. Because the blow to low-income people is disproportionate, wages still tend to rise. "
Euro/USD: skills analysis
The rise of EUR/USD slowed down after entering an important short-term resistance range, which included a low of 20 17 1. 1709, a 38.2% Fibonacci retracement level /20 18 high, and the level when the European Recovery Fund was announced at the end of May to a high in June, and then reached 6.
In addition, the downtrend line connecting the highs in 2008 and 20 14 is located near the line 1. 1800. If we break through this range1.1709-1.1800, it implies that the meaningful long-term rise of EUR/USD is on. The EUR/USD is now at Thursday's-,13- and 2 1- moving averages. In terms of target, MACD is above the signal line, indicating bullish, and RSI target is in the overbought area.
At present, EUR/USD is stable above the daily bullish 5-, 8-, 13- and 2 1- moving averages. Although MACD has cooled down, it is still in the bullish range, and the slow random target starts to fall from the overbought range, but then there is no price drop. The bullish momentum is still strong, and the temporary suspension of trading may not mean that the rally is now over.
The fulcrum of Yin Qian is at 1. 175 1. The initial resistance of the upward exchange rate is at 1. 1806, the further resistance is at 1. 1852, and the key resistance is at/kloc-. The initial support for the downside of the exchange rate is at 1. 1705, the further support is at 1. 1650, and the more important support is at 1. 1604.