Technical Bias: Bullish
Highlights:
- Heavy slate of economic data in-store for the US dollar, including durable goods orders, CPI and revised GDP.
- EURUSD enjoying strong upside for the first time in weeks, edging further away from parity.
- Greek PM Tsipras set to meet with German Chancellor Merkel early in the week.
The euro is enjoying strong upside against the US dollar, having gained more than 300 pips last week to reach its highest level since March 10. The EURUSD has a favourable short-term outlook, although that could change with the presence of upbeat US economic data.
The EURUSD closed at 1.0820 last week, as the dollar declined by the widest margin since 2011. The US dollar index fell below 98.00 after climbing past the key 100.00 mark earlier this month.
The Greek debt crisis will continue to top headlines this week. Greek Prime Minister Alexis Tsipras will visit Berlin on March 23 to meet with German Chancellor Angela Merkel. The meeting comes just a few days after the European Union extend an olive branch to the cash-strapped Greek government. The EU has made available to Greece €2 billion in unused development funds in exchange for submitting a clearer reform pledge, which the Greek government has promised to do.
Eurozone Data
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Industry data headline Eurozone releases this week. Markit Group will report on Eurozone and German manufacturing and services PMI on Tuesday. Business activity in both sectors is forecast to improve gradually in March.
On Wednesday the IFO Institute will report on German business confidence, which has been gradually trending upwards in recent months. The index of expectations, current conditions and the overall business climate are forecast to improve in March, according to economists.
US Data
The United States will release a slew of economic data this week. On Monday the National Association of Realtors will report on existing home sales, which are forecast to increase in February. The Commerce Department will complete the housing picture on Tuesday with a report on February new home sales.
The Commerce Department on Tuesday will also report on inflation. The annual CPI rate for February is forecast to drop 0.1 percent, unchanged from the previous month. Core inflation is forecast to climb 1.6 percent annually.
Government economists will report on durable goods orders on Wednesday, a high profile data release that will be monitored closely. Durable goods orders are forecast to rise 0.2 percent in February following a 2.8 percent gain in January.
The week draws to a close with a revised reading of fourth quarter GDP. The economy expanded 2.2 percent annually in the final quarter of 2014, according to previous estimates. Recent data suggest there will be another downward revision to fourth quarter growth, perhaps as low as 2.1 percent.
For more insights on the Forex market, visit http://www.fxtimes.com.
