EUR/USD 23-27 May

The Fed meeting minutes put a June rate hike firmly on the table and this was clearly felt in EUR/USD. Data was also OK, with inflation looking relatively solid, especially when compared to the euro-zone. As expected, core euro area inflation was downgraded to 0.7% for April. Is there more to this downtrend or just a mean reversion?
Updates:EUR/USD daily graph with support and resistance lines on it. Click to enlarge:

1. Flash PMIs: Monday: 7:00 for France, 7:30 for Germany and 8:00 for the whole euro-zone. Markit releases the preliminary purchasing managers’ indices for May. In France, the final manufacturing PMI for April stood on 48 points, under the 50 point threshold separating growth and contraction. A rise to 49 points is on the cards. The services sector did better with 50.6 points and is now predicted to tick up to 50.8. In Germany, the continent’s powerhouse, manufacturing was in growth territory in April with 51.8 points. A small rise to 52.1 is on the cards. The services sector looked better with 54.5 points and a move to 54.6 is expected.. For the whole euro-zone, manufacturing stood on 51.7 and services were at 53.1 points. Advances to 51.9 and 53.3 for manufacturing and services are expected respectively.
2. Consumer Confidence: Monday, 14:00. In April, confidence improved with a rise to -9 points. This is still in negative territory and may remain around these levels also in May.
3. Eurogroup meetings: Tuesday. Two weeks after the Eurogroup decided to begin talking about Greece’s debt, the sides meet again. The IMF, one of Greece’s creditors, has published an offer for debt relief, basically postponing payments to 2040 and spreading them out until 2080. The suggestion also includes measures for the shorter term. Will Germany agree to some debt relief? That was a big sticking point in negotiations so far. There is also a good chance that they will decide to decide only after the EU Referendum in Britain, kick the can further down the road.
4. German GDP (final): Tuesday, 6:00. According to the preliminary release, the German economy grew by 0.7% in Q1 2016, much better than in previous quarters. This will likely be confirmed now.
5. German ZEW Economic Sentiment: Tuesday, 9:00. This survey has shown improving sentiment in Germany, with the main indicator surprising with 11.2 points in April. The fresh figure for May could be slightly better with 12.1 points. The all-European figure stood on 21.5 points and 23.4 is on the cards.
6. German GfK Consumer Climate: Wednesday, 6:00. This survey has shown improvement also among consumers, with a rise to 9.6 points in April. The 2000 strong survey could show the same score also now.
7. German Ifo Business Climate: Wednesday, 8:00. Contrary to ZEW, Germany’s No. 1 Think-Tank has shown a deterioration in sentiment, with business climate reaching 106.6 in April. A rise to 106.9 is predicted.
8. ECB Financial Stability Review: Thursday, 8:00. This report, published only twice a year, offers the European Central Bank an opportunity not only to talk about financial stability within the European institutions but also a broader view on the economy.
9. Belgian NBB Business Climate: Friday, 13:00. Despite coming from a small country, this survey of 6000 businesses is considered a barometer for the wider European economy. It dropped to -2.4 points in April, rising but still in negative territory. A move to -1.8 is on the cards.

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