EURUSD on Friday rose 1.14% to 1.09098. Week ending 2024-08-02 rose 0.52%. What’s going on.

EURUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	1.14%	123.5 Pips
Week 2024-08-02	0.52%	56 Pips	August	0.79%	85.9 Pips

Upcoming key events for the new week (London Time)

Thu 01:30 PM Initial Unemployment Insurance Claims

What happened over the week

In the United States, there were significant declines in various economic indicators. Factory orders in June dropped to -3.3% from -0.5% in May, according to the Census Bureau. Average hourly earnings for July fell to 0.2%, down from 0.3% in June, as reported by the Bureau of Labor Statistics (BLS). Nonfarm payroll employment also saw a notable reduction, with July’s figure at 114,000 compared to 179,000 in June (revised from 206,000). The Q2 flash estimate for unit labor costs decreased to 0.9% from 4% in Q1, while labor productivity rose to 2.3% from 0.2% in the same period. Additionally, initial unemployment insurance claims for the week ending July 27 increased to 249,000 from 235,000. The BLS also reported a drop in the Employment Cost Index (ECI) in Q2 to 0.9% from 1.2% in Q1. Meanwhile, the U.S. Federal Reserve left the Federal Funds Rate unchanged at 5.5%. The JOLTS report showed job openings declining to 8.184 million in June from 8.23 million in May (revised from 8.14 million). Furthermore, the U.S. House Price Index for May was unchanged at 0%, down from a revised 0.3% in April.

In the Euro Area, there was a mix of developments. The unemployment rate rose to 6.5% in June from 6.4% in May, according to Eurostat. The Harmonised Index of Consumer Prices (HICP) for July’s flash estimate increased slightly to 2.6% from 2.5% in June, while the Core HICP dropped to -0.2% from 0.4%. The one-month HICP for July fell to 0% from 0.2% in June. Business Climate Indicator (BCI) in July decreased to -0.61 points from -0.46 points in June, and the Economic Sentiment Indicator (ESI) also declined slightly from 95.9 points in June to 95.8 points in July. Consumer confidence remained unchanged at -13 points in July. The GDP for Q2 remained steady at 0.3%, while the 12-month GDP growth rate rose to 0.6% from 0.4% in Q1.

In Germany, the unemployment change in July improved slightly to 18,000 from 19,000 in June, and the seasonally adjusted unemployment rate remained constant at 6%. The CPI inflation rate for July’s flash estimate rose to 0.3% from 0.1% in June. The Harmonised Index of Consumer Prices (HICP) for July’s flash estimate increased to 2.6% from 2.5% in June. Germany’s GDP figures showed mixed results: the Q2 flash estimate for GDP (3-mth) dropped to -0.1% from 0.2% in Q1, while the 12-month rate improved to -0.1% from -0.2%, and the Gross Domestic Product WDA for Q2 rose to 0.3% from -0.9% in Q1.

The recent developments indicate a period of slowing economic activity and monetary stability in the U.S. coupled with mixed signals from the Euro Area and Germany. The recent rise in EURUSD to 1.09098, up 1.14% on Friday and 0.52% for the week ending August 2, suggests that investors are adjusting their positions based on the relatively weaker economic data from the U.S. Additionally, the Euro Area and Germany’s inflation and GDP figures, though mixed, provide some underlying strength to the Euro. Thus, weaker U.S. data combined with stable or slightly improving metrics in Europe has contributed to the rise in the EURUSD exchange rate.

From X (Twitter)

Euro area #inflation expected to be 2.6% in July 2024, up from 2.5% in June. Components: services +4.0%, food, alcohol & tobacco +2.3%, energy +1.3%, other goods +0.8% – flash estimate https://t.co/NR5xrAlu0f pic.twitter.com/okCWvDmJrc

— EU_Eurostat (@EU_Eurostat) July 31, 2024

Unemployment rate rises to 4.3% in July; payroll employment edges up by 114,000 #JobsReport #BLSdata https://t.co/ZwrVfLviqL

— BLS-Labor Statistics (@BLS_gov) August 2, 2024

What can we expect from EURUSD for the new week and what happened on Friday?

EURUSD on Friday rose 1.14% to 1.09. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2024-08-02, the pair rose 0.52% or 56 pips higher.

Looking ahead, EURUSD looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 1.10 (WR1) with break above could target 1.10 (WR2). On the downside, we are looking at week low of 1.08 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.09 would suggest bullish bias after recent positive movement.

For the month of August, EURUSD is up by 0.79% or 85.9 pips higher.

Weekly key levels to watch out:

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Construction Spending Source: Census Bureau
In June 2024, manufacturing output bounced back moderately (+0,8 %) Source: INSEE
Euro area unemployment at 6.5% Source: Eurostat
In June 2024, agricultural producer prices fell back over one month and year on year Source: INSEE
Euro area annual inflation up to 2.6% Source: Eurostat
Gross Domestic Product for Puerto Rico, 2022 Source: Bureau of Economic Analysis
Federal Reserve issues FOMC statement Source: Federal Reserve
Housing Vacancies and Homeownership Source: Census Bureau
Rental Vacancy Rate Source: Census Bureau
In May 2024, manufacturing turnover fell back sharply (-4.0%) Source: INSEE
In June 2024, the industrial producer prices went down by 0.2% over a month and by 4.6% over a year Source: INSEE
In May 2024, sales volume in trade decreased by 0.4% Source: INSEE
Downturn in services output in May 2024 (‑0.3%) Source: INSEE
In July 2024, consumer prices increased by 2.3% year on year Source: INSEE
GDP up by 0.3% in both the euro area and the EU Source: Eurostat
Inflation rate in July 2024 expected to be +2.3% Source: Statistisches Bundesamt (Destatis)
Gross domestic product in the second quarter of 2024 0.1% lower than in the previous quarter Source: Statistisches Bundesamt (Destatis)
GDP increased by 0.3% in Q2 2024 Source: INSEE
Household consumption of goods fell in June 2024 (-0.5%) Source: INSEE