Forecast for the week of 1.07.2013 – 5.07.2013

The coming week will become the first week of the new months, so it will be traditionally filled with key macroeconomic data. On Monday, July 1 (14:00 GMT), the Supplies Management Institute will publish the PMI index data in the industrial sector, and on Wednesday at the same time – a similar data in the non-industrial sector. Both indicators have a very high surpassing correlation with the economic trend and can have a significant impact on the investros’ mood. In June, the reports have somewhat escalated the situation, after the industrial index dropped below the recession border mark of 50%, having reached the 49.0% value.

On Wednesday, July 3 at 12:15 GMT, ADP Inc will provide its version of the new jobs number in the non-agricultural sectors of the US economy. The indicator is published two days before the issue of the Labor Statistics Bureau release on the labor market, and their dynamics often matches. Therefore, here sharp market movements are also possible, immediately following the numbers’ release.

The week will be ended for the Dollar by the official labor market data (July 5, 12:30 GMT). They are now significant as never before. The US Federal Reserve in its quantitative easing program folding plans will largely act upon the employment situation, so a more detailed analysis of the release can form grounds for further large-scale action.

Overall, the US macroeconomic data has been somewhat improving recently, and we expect the above reports to facilitate the Dollar’s strengthening. On Thursday, July 4, there will be Independence Day in the US.

The European Central Bank Governing Council will hold its next meeting on the monetary credit policy issues, the outcomes of which will be announced on Thursday, July 4. We do not expect any significant changes in the monetary credit policy from it after it increased the Eurozone’s economic forecasts for 2014 following a similar previous meeting and announced that there’s currently no need for the non-traditional economic stimulation methods. Nonetheless, the Mario Draghi press conference’s events (12:45 GMT) are often a reason for serious movements, especially on a US holiday. That’s why we suggest staying out of the market and watch the developments from the side. The RSM regime will be activated on this day.

From the technical analysis perspective, in case of the Dollar strengthening its pressure on the competitors, the EURUSD movement goal can become the 1.2840 mark. The quotes’ consolidation above the 1.3145 level can become a signal to a possible halt of the downfall.

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