EUR/USD – Listless as German Confidence Data Mixed

EUR/USD is almost unchanged on Friday, as the pair’s lack of movement continues. In the European session, the pair is trading in the mid-1.34 range. In economic news, German Ifo Business Climate, slipped to a nine-month low. German Consumer Climate looked very sharp, rising to 9.0 points. In the US, today’s highlight is Core Durable Goods Orders. The markets are expecting a healthy gain after a decline in the May release. On Thursday, US Unemployment Claims sparkled but New Home Sales were well short of expectations.

German indicators measuring confidence in the economy sent mixed signals on Friday. Ifo Business Climate, a key indicator, dipped to 108.0 points, its lowest since September. At the same time, Consumer Climate continued its upward trend, hitting 9.0 points, just above the estimate of 8.9 points. German data can have a major impact on the euro, as the country boasts the largest economy in the Eurozone. If the markets show concern about the weak business climate figure, we could see the euro under pressure during the day.

In one of the first signs that the ECB’s recent rate cuts may be bearing fruit, Eurozone PMIs posted encouraging numbers on Thursday. German Services and Manufacturing PMIs improved in June and beat their estimates. Services PMI was particularly impressive, hitting a three-year high, at 56.6 points. In the Eurozone, Services PMI easily beat the estimate, while Manufacturing PMI met expectations. French data, however, failed to keep pace with its European counterparts. Manufacturing PMI came in below the 50-point level, the mark that indicates expansion, for a second straight month, indicating contraction in the manufacturing sector. Services PMI pushed above 50 for the first time since March.

In the US, Unemployment Claims tumbled last week, as the key indicator fell to 284 thousand, its lowest level since February 2008. This surprised the markets, which had expected a reading of 310 thousand. The strong release continues a string of solid employment data, and the dollar could get a boost from the good news. As well, good news on the employment front is bound to increase speculation about a rate increase by the Federal Reserve.

US housing data was dismal on Thursday, as New Home Sales slumped to a three-month low. The key indicator fell to 406 thousand, compared to 504 thousand in the previous release. The markets were way off in their forecast, with an estimate of 485 thousand. There was much better news earlier in the week, as Existing Home Sales jumped to 5.04 million, surpassing the estimate of 4.94 million. This was the best showing we’ve seen since October.

 

EUR/USD for Friday, July 25, 2014

EUR/USD July 25 at 7:55 GMT

EUR/USD 1.3466 H: 1.3476 L: 1.3461

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3175 1.3295 1.3346 1.3487 1.3585 1.3651

 

  • EUR/USD was unchanged for most of the Asian session. The pair has edged lower in European trading.
  • 1.3346 is providing strong support.
  • On the upside, 1.3487 remains under pressure. 1.3585 is stronger.
  • Current range: 1.3346 to 1.3487

Further levels in both directions:

  • Below: 1.3346, 1.3295, 1.3175 and 1.3104
  • Above: 1.3487, 1.3585, 1.3651 and 1.3786

 

OANDA’s Open Positions Ratio

EUR/USD ratio is almost unchanged on Friday. This is consistent with the movement of the pair, as the pair is showing little activity. The ratio has a majority of long positions, indicative of trader bias towards the euro breaking out and moving to higher ground.

 

EUR/USD Fundamentals

  • 6:00 GfK German Consumer Climate. Estimate 8.9 points. Actual 9.0 points.
  • 8:00 German Ifo Business Climate. Estimate 109.6 points. Actual  108.0 points.
  • 8:00 Eurozone M3 Money Supply. Estimate 1.1%. Actual 1.5%.
  • 8:00 Eurozone Private Loans. Estimate -1.8%. Actual -1.0%.
  • 12:30 US Core Durable Goods Orders. Estimate 0.6%.
  • 12:30 US Durable Goods Orders. Estimate 0.4%.
  • 13:00 Belgian NBB Business Climate. Estimate -6.5 points.

*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.