The unemployment in Spain dropped in May. The number of people out of work fell by 98.3K from April when it fell 46.1K. Specialists forecast a drop for 50.2K. However, PPI in the eurozone in April dropped considerably since med-2009, -0.6% vs. estimates for -0.2%. US Trade Balance in April was slightly better than forecast, -40.3 billion US dollars vs. -41.1 billion US dollars. Uncertainty about the Fed's measures to QE3 raised profitability of US 10-year bonds up to 2.16%. Amid the news the euro was trading sideways.
As we noticed in the yesterday's analysis, probably the euro will be exposed to negative news onwards. At 12:00 GMT+4 Services PMI in the eurozone in May is published, it is forecast to be flat, 47.5. At 13:00 GMT+4 Retail sales in the eurozone in April are published, forecast -0.2% vs. -0.1% in March. At 13:00 GDP in the eurozone in Q1 in the second estimate is revealed, it is expected to be flat, -0.2%.
At 16:15 GMT+4 ADP Non-Farm Employment Change in May is revealed, forecast 170K vs. 119K in April. At 18:00 GMT+4 ISM Non-Manufacturing in May is published, forecast 53.4 vs 53.1. at the same time US Factory Orders in April is issued, forecast 1.6% vs. -4.9% in March. At 22:00 GMT+4 the Fed is scheduled to issue its Beige book report on the economy.
According to the preliminary report, the situation in the eurozone is “not bad”, meanwhile, in the US it is considerably better. We expect the dollar strengthens and the stock market will grow (according to inverse correlation to the euro).
Technically, when the testing level 1.3050 is broken, the first target 1.3015 opens, then 1.2973, the level of Fibonacci 23.6% on the H4.
