EUR/USD – Unchanged As Dollar Remains Firm

EUR/USD is unchanged on Monday, as the pair trades quietly in the mid-1.34 range in the European session. On the release front, it’s a very quiet start to the week, with just two releases out of the US, highlighted by Pending Home Sales. There are no Eurozone releases on Monday.

On Friday, German Ifo Business Climate, a key indicator, dipped to 108.0 points, its third straight decline. There was better news from German Consumer Climate, which continued its upward trend, hitting 9.0 points, just above the estimate of 8.9 points. Germany has not been immune to Eurozone inflation woes, and we’ll get a look at German Preliminary CPI on Wednesday, with the markets anticipating a small gain.

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, a positive week ended on a high note, as durable goods data exceeded expectations. Core Durable Goods Orders jumped 0.8%, beating the estimate of 0.6%, and rebounding nicely from a decline of 0.1% in May. Durable Goods Orders followed suit, posting a gain of 0.7%, compared to a weak reading of -1.0% last month. This easily surpassed the estimate of 0.4%. Earlier last week, Unemployment Claims tumbled, 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, which has helped the dollar. As well, positive news on the employment front is bound to increase speculation about a rate increase by the Federal Reserve.

 

EUR/USD for Monday, July 28, 2014

EUR/USD July 28 at 8:40 GMT

EUR/USD 1.3436 H: 1.3438 L: 1.3427

 

EUR/USD Technical

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

 

  • EUR/USD has shown very little movement in the Asian and European sessions.
  • 1.3346 continues to provide strong support.
  • On the upside, 1.3487 is an immediate resistance line. 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 pointing to gains in long positions on Monday. This is consistent with the movement of the pair, as the euro is showing small gains. The ratio has a majority of long positions, indicative of trader bias towards the euro moving to higher ground.

 

EUR/USD Fundamentals

  • 13:45 US Flash Services PMI. Estimate 62.3 points.
  • 14:00 US Pending Home Sales. Estimate -0.2%.

*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.