Forex - EUR/USD weekly outlook: September 2 - 6

Forex - EUR/USD weekly outlook: September 2 - 6

Submitted by caseyb23 on Mon, 09/02/2013 - 03:20

Forex - EUR/USD weekly outlook: September 2 - 6

Investing.com – The euro eased back from five-week lows against the dollar on Friday but still ended the week lower as concerns over a possible U.S. military intervention in Syria underpinned dollar demand.

EUR/USD fell to lows of 1.3174, the lowest since July 25 before paring back some losses to settle at 1.3218, 0.17% lower for the day and ending the week down 1.19%.

The pair is likely to find support at 1.3172, Friday's low and resistance at 1.3300.

The dollar remained supported amid concerns over prospects for a U.S. led military intervention against Syria, following accusations the government used chemical weapons against civilians.

Meanwhile, data on Friday showed that U.S. consumer sentiment was lower in August, pulling back from July's six-year high. The final reading of the University of Michigan's consumer sentiment index slipped to 82.1 from a final reading of 85.1 in July.�

The report came one day after official data showed that U.S. second quarter growth was revised sharply higher, indicating that the economic recovery is on track.

The Commerce Department said gross domestic product expanded at an annual rate of 2.5% in the three months to June, above expectations for growth of 2.2% and up from a preliminary estimate of 1.7%.

The upbeat data reinforced the view that the Federal Reserve could start phasing out stimulus measures as soon as next month.

The euro came under pressure after official data on Friday showed the number of unemployed people in the euro zone fell by 15,000 in July, but the unemployment rate remained unchanged at a record high 12.1%.

The traditional safe haven yen was stronger against the euro on Friday, with EUR/JPY falling to lows of 129.31, the lowest since August 20 before trimming losses to settle at 129.73, 0.33% lower for the day and extending the week's losses to 1.33%.

In the week ahead, markets in the U.S. are to remain closed on Monday for the Labor Day holiday. Investors will be closely watching Friday's key U.S. nonfarm payrolls report, amid ongoing speculation over when the Fed will start to unwind stimulus measures.

Sentiment on the euro is likely to remain fragile ahead of Thursday's European Central Bank policy meeting.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, September 2

Markets in the U.S. are to remain closed for the Labor Day holiday.

Tuesday, September 3

In the euro zone, Spain is to release official data on the change in the number of people unemployed, a leading indicator of economic health.

Later in the day, the Institute of Supply Management is to release data on manufacturing activity in the U.S., a leading indicator of economic health.

Wednesday, September 4

The euro zone is to release official data on retail sales, while Spain and Italy are to release reports on service sector activity.

The U.S. is to release data on the trade balance, the difference in value between imports and exports.

Thursday, September 5

In the euro zone, Spain and France are to hold auctions of 10-year government bonds. Germany is to publish government data on factory orders, a leading indicator of production.

The ECB is to announce its benchmark interest rate. The announcement is to be followed by what will be a closely watched press conference with President Mario Draghi.

The U.S. is to release the ADP nonfarm payrolls report on private sector job creation, as well as the weekly government report on initial jobless claims.

Later Thursday, the ISM is to release data on non-manufacturing activity in the U.S., a leading indicator of economic health.

Friday, September 6

Germany is to release official data on the trade balance and industrial production.

The U.S. is to round up the week with closely watched government data on nonfarm payrolls and the unemployment rate, as well as data on average hourly earnings.�