EUR/USD – Limited Movement Ahead of Unemployment Claims

The euro continues to show little movement on Thursday, as EUR/USD trades quietly in the low-1.29 range. On the release front, German CPI slipped to 0.0% last month, matching the forecast. Later in the day, ECB head Mario Draghi will address the Eurofi Financial Forum in Milan, Italy. The markets will be listening closely after Draghi’s dramatic rate cuts last week. In the US, today’s highlight is Unemployment Claims. The estimate stands at 306 thousand, slightly higher than last week’s reading of 302 thousand.

Will the real Germany please stand up? Recent German numbers have been mixed. GDP and Business Climate looked weak, while recent manufacturing data has been sharp. This week started off on a high note, as the trade surplus climbed to EUR 22.2 billion, up from 16.2 billion a month earlier. This easily beat the estimate of 17.3 billion. The strong figure follows impressive German manufacturing data last week, led by Industrial Production, which gained 1.9% in August, its strongest showing in 2014. Inflation (or the lack of) continues to be a major concern in the Eurozone. German CPI dipped to 0.0% last month, down from 0.3%. Low inflation levels continue to weigh on the shaky euro, which finds itself looking upwards at the 1.30 line.

US numbers continue to point to a deepening recovery, but the labor market is showing some troubling signs. JOLTS Job Openings was unchanged in August at 4.67 million, short of the estimate of 4.72 million. On Friday, the eagerly-anticipated Nonfarm Employment Change crashed to 142 thousand, its lowest gain since January. This surprised the markets, which had expected a gain of 226 thousand. Unemployment Claims fell short of the estimate last week and another weak reading on Thursday could temper the dollar’s impressive rally.

After months of fighting in eastern Ukraine between government forces and pro-Russian fighters, a ceasefire which began on Friday appears to be holding up, although some sporadic fighting has been reported. Russia has denied assisting the rebels, but both Ukraine and NATO have said that Russian forces have aided the separatists and attacked government positions. The crisis has severely strained relations between the West and Russia, and trade between Europe and Russia has suffered as a result. European countries have already implemented sanctions against Russia and have threatened further sanctions if the latest ceasefire does not hold.

 

EUR/USD for Thursday, September 11, 2014

EUR/USD September 11 at 10:35 GMT

EUR/USD 1.2914 H: 1.2940 L: 1.2897

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.2688 1.2806 1.2905 1.2984 1.3104 1.3175

 

  • EUR/USD was flat in the Asian session. The pair edged higher in the European session but has since retracted.
  • 1.2905 is under strong pressure and was tested late in the European session. 1.2806 is stronger.
  • 1.2984 is the next resistance line. 1.3104 is next.
  • Current range: 1.2905 to 1.2984

Further levels in both directions:

  • Below: 1.2905, 1.2806, 1.2688 and 1.2518
  • Above: 1.2984, 1.3104, 1.3175 and 1.3288

 

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged on Thursday. This is consistent with the lack of movement currently displayed by the pair. The ratio has a majority of long positions, indicative of a trader bias towards the euro  breaking out of range and moving upwards.

 

EUR/USD Fundamentals

  • 1:00 US President Barak Obama Speaks.
  • 6:00 German Final CPI. Estimate 0.0%. Actual 0.0%.
  • 6:45 French CPI. Estimate 0.4%. Actual 0.4%.
  • 8:00 ECB Monthly Bulletin.
  • Tentative – Spanish HPI.
  • 12:30 US Unemployment Claims. Estimate 306K.
  • 14:30 US Natural Gas Storage. Estimate 84B.
  • 17:01 US 30-year Bond Auction.
  • 18:00 US Federal Budget Balance. Estimate -132B.
  • 19:00 ECB President Mario Draghi Speaks.

*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.