Forecasts Macro EUR / USD for the week of 04 September 2017: Will Mario Draghi calm the Euro? :


EUR / USD scored a high above 1.20 earlier this week, in the wake of Yellen and Draghi's speeches at Jackson Hole. The latter have had no comments that could have called into question the upward trend.

Bulls therefore forced the passage before sellers' interests and certainly profits catches the cross close to 1.18. The NFP report is inconclusive to raise the cross but the rumors around the ECB have kept the current bearish. Indeed, some governors would worry about the rise of the Euro ... It was all that was necessary for the bearers to start placing themselves in anticipation of a Dovish press conference on behalf of Draghi.

But it is now being said that the ECB will wait until December to make its announcements about EQ. Here is what the economic calendar this week on both sides of the Atlantic:

US Statistics

On Monday the markets will be closed. No publications.

On Wednesday, the ISM service sector index (16h) is expected to rise to 55.3 against 53.9 the previous month, in August.

On Thursday we will monitor the unit labor cost (14:30) given the disappointing figures in the NFP report. The consensus is rising by 0.3% for Q2 against 0.6% in Q1. Also keep an eye on oil stocks and WTI. But more likely, the ECB will capture all the attention.

European Statistics

Tuesday at 11am, we will have the GDP growth of the Euro Zone which will obviously be compared with the growth of the US which was strong in the second quarter. A 2.2% increase is expected from one year to the next, as in Q1. We will have at the same time the sales to the details but they should slow down to 2.5% y / y against 3.1% in June. First of all we will have the PMI indices of the services sector and composite at 9.55 in Germany. The index should remain unchanged from July.

On Thursday we will have the press conference of the ECB. This will be the highlight of the week and in case of Dovish comments we should see the Euro continue its downturn. We had advised last week to drop to above 1.20 in anticipation of this week. With the Euro rising so strong this year that we would not be surprised if Mario Draghi managed to show Dovish by reducing the EQ while extending it longer than anticipated. It is also possible that Draghi suggests that the era of the open is over and in this case, EUR / USD could continue to progress. How far? In Jackson Hole, Draghi said that "a significant degree of accommodative monetary policy is still necessary" ...

Fundamental analysis EUR / USD

EUR / USD found a bone on 1.20 last week. Everything will now depend on Mario Draghi. Things are simple. Markets pushed the Euro to test the ECB's helmsman. We passed the psychological threshold of 1.20 before the lack of reaction to Jackson Hole. This week, Mario Draghi has a chance to show more Dovish than anticipated in order to plumber EUR / USD. And it is now what the market now seems to bet given the sharp correction of the cross. The bigs guns fell at the end of last week.
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