EURUSD Weekly outlook 03-07-2016

EURUSD in a messy correction

EURUSD is in a corrective rally and continued to recover from the Brexit drop. Although the week closed higher than the open, the structure of the rally is pretty much corrective.

eu-4h-3-7-16-outlook

Short terms trades are next to impossible until there will be enough signs of a completed corrective structure. At the moment its not clear enough as to the time factor of the correction. Boundary lines of the structure seems to converge squeezing the price to a tight range.

eu-h-3-7-16-outlook

In terms of Elliott waves the expectation is for the next impulse down as the 3rd wave of a higher degree and the C wave of an even higher degree. However it is much more complicated to conclude the structure of this possible 2nd wave. But its not worth the risk to pick tops at this moment. Specially after the massive Brexit move.

Major news events next week

 

MonJul 4
TueJul 5
WedJul 6 10:00am USD
ISM Non-Manufacturing PMI
53.5 52.9
2:00pm USD
FOMC Meeting Minutes
ThuJul 7 8:15am USD
ADP Non-Farm Employment Change
151K 173K
8:30am USD
Unemployment Claims
272K 268K
11:00am USD
Crude Oil Inventories
-4.1M
FriJul 8 8:30am USD
Average Hourly Earnings m/m
0.2% 0.2%
USD
Non-Farm Employment Change
181K 38K
USD
Unemployment Rate
4.8% 4.7%

 

While there is no major news events from Europe next week, there is NFP on Friday. The last NFP reported only 38k, which was the lowest recorded for almost 6 years. So there is enough room for improvement in the NFP figure this month. Nevertheless, the fate of eurusd will primarily depend on the USD for the upcoming week.

So what this means is more bad news for EUR. Especially considering that the wave analysis of the Dollar index forecast a possible end of correction. So this could be the week that the bullish impulse starts for the Dollar – also creating pressure for the EUR to decline further down. Non-farm-payroll alone can move the market only for a brief period of time.

NFP note: It is NOT recommended to trade specifically on such events, unless you employ a sound strategy to minimize risk.

Completion of the Dollar index weekly flat correction

usd-index-weekly-flat

So the long term view is for the USD to appreciate and the EUR to decline further. So the EURUSD has more bearish potential.

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