Technical Bias: Bullish
- EURUSD advanced more than 300 pips last week, as the US dollar declined across the board.
- Key US data this week: durable goods orders, CPI and revised Q4 GDP.
- Greek PM Tsipras will meet with German Chancellor Merkel in Berlin on Monday after EU offered Greece €2 billion in unused development funds in exchange for reforms.
- Heavy slate of economic data in-store for the US dollar, including durable goods orders, CPI and revised GDP.
The EURUSD has entered its first bullish phase in several weeks, as the dollar was hit hard by an overly cautious Federal Reserve, which only last week said interest rates will rise much more slowly than previously forecast. The week ahead features several high profile economic data releases from the United States, as well as key negotiations between Greece and its EU paymasters about a new bailout agreement.
The EURUSD edged lower in Monday’s Sydney session, falling 0.1 percent to 1.0831. The pair surged more than 300 pips last week, reaching its highest level since March 10.
Negotiations between Greece and Germany will continue this week, as Prime Minister Alexis Tsipras has been invited to Berlin on Monday to speak with German Chancellor Angela Merkel. The cash-strapped Greek government will receive €2 billion in EU development funds, according to an accord struck at last week’s European Summit in Brussels. In exchange, the Syriza party is expected to table clearer reforms in the coming days. The newly elected government has been defiant in its “anti-austerity” stance since assuming office in January.
Eurozone data this week will be headlined by flash PMI estimates and German business confidence. On Tuesday Markit Group will release Eurozone and German manufacturing and services PMI. The gauges in both regions are forecast to improve in March, a sign the struggling euro area was turning a tide after a disappointing 2014.
On Wednesday the IFO Institute will release German business confidence, a closely watched indicator of expectations and overall business conditions. The indicator has risen prominently in recent months and is expected to improve again in March, according to forecasts.
In the United States, several batches of economic data will be released this week, including CPI consumer inflation and durable goods orders.