EUR/USD: Almost Unchanged on Mixed Eurozone Data

EUR/USD is flat on Tuesday, as the pair trades in the high-1.36 range in Tuesday’s European session. On the release front, Eurozone PMIs were mixed, as Spanish Manufacturing PMI improved in June, but the Italian indicator weakened and missed the estimate. German Unemployment Change disappointed, rising for the second straight month. In the US, today’s highlight is ISM Manufacturing PMI, with the markets expecting another strong reading for June.

Weak German data continues to be a concern. The week started with Retail Sales, the primary gauge of consumer spending, posting its third straight decline. The indicator came in at -0.6% last month, well off the forecast of +0.8%. Unemployment Change, which had posted strong declines in the first quarter of the year, has reversed direction and recorded two straight gains, pointing to trouble in the employment sector. In June, the indicator came in at +9K, compared to an estimate of -9K.

Last Friday, Ukraine signed an association agreement with the EU, which strengthens economic and political ties between Ukraine and the EU. Earlier in the year, the decision by the Ukrainian president not to sign the deal led to widespread demonstrations and the installation of a new government in Kiev. Predictably, Russia is upset about the trade deal and has warned about consequences if its economic interests are harmed as a result of the agreement. The situation remains tense in eastern Ukraine, and a flare-up in violence could rattle the markets and affect the euro.

In the US, the week started out in impressive style, as Pending Home Sales jumped 6.1%, crushing the estimate of 1.4%. This was the strongest gain since May 2013. US Housing numbers were excellent last month, as New Home Sales and Existing Home Sales both beat their estimates. Last week’s dismal Q1 GDP reading has weighed on the US dollar, so the currency could lose even more ground to the pound if the markets aren’t happy with this week’s numbers.

 

EUR/USD for Tuesday, July 1, 2014

EUR/USD July 1 at 9:05 GMT

EUR/USD 1.3684 H: 1.3694 L: 1.3678

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3487 1.3585 1.3651 1.3786 1.3893 1.4000

 

  • 1.3651 has reverted to support role. 1.3585 is stronger.
  • On the upside, 1.3786 is the next resistance line.
  • Current range: 1.3651 to 1.3786

Further levels in both directions:

  • Below: 1.3651, 1.3585, 1.3487 and 1.3346
  • Above: 1.3786, 1.3893, 1.40, 1.4172

 

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in short positions on Tuesday, continuing the trend seen a day earlier. This is consistent with the movement of the pair, as the euro has posted very small losses. The ratio is showing a slight majority of short positions, indicative of a slight trader bias to the US dollar moving higher against the euro.

 

EUR/USD Fundamentals

  • 7:15 Spanish Manufacturing PMI. Estimate 53.2 points. Actual 54.6 points.
  • 7:45 Italian Manufacturing PMI. Estimate 53.5 points. Actual 52.6 points.
  • 7:55 German Unemployment Change. Estimate -9K. Actual +9K.
  • 8:00 Eurozone Final Manufacturing PMI. Estimate 51.9 points. Actual 51.8 points.
  • 8:00 Italian Monthly Unemployment Rate. Estimate 12.6%. Actual 12.6%.
  • 9:00 Eurozone Unemployment Rate. Estimate 11.7%.
  • 12:00 Treasury Secretary Jack Lewis Speaks.
  • 13:45 US Final Manufacturing PMI. Estimate 57.5 points.
  • 14:00 US ISM Manufacturing PMI. Estimate 55.6 points.
  • 14:00 US Construction Spending. Estimate 0.5%.
  • 14:00 US IBD/TIPP Economic Optimism. Estimate 48.9 points.
  • 14:00 US ISM Manufacturing Prices. Estimate 60.0 points.
  • All Day – US Total Vehicle Sales. Estimate 16.5M.

*Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.