EUR/USD – Calm Ahead of US Job Opening Data

EUR/USD is steady on Tuesday, as the pair is trading in the mid-1.23 range. On the release front, German Trade Balance improved to EUR 20.6 billion. In the US, today’s highlight is JOLTS Job Openings. The markets are expecting an improvement in the October release, with an estimate of 4.81M.

German numbers have been mixed recently and the trend has continued this week. On Tuesday, Trade Balance climbed to EUR 20.6 billion, marking a 3-month high. This easily beat the estimate of 18.1 billion. On Monday, German Industrial Production didn’t look sharp, posting a weak gain of 0.2%. This was a sharp drop from the 1.4% gain a month earlier. As the Eurozone’s largest economy, the euro is sensitive to German data and could lose more ground if key German data misses expectations.

The US ended the week with a superb Nonfarm Payrolls report, as the indicator shot up to 321 thousand in November, stunning the markets which had expected a rise of 231 thousand. There was also a rise in wages, which should translate into stronger inflation numbers. The unemployment rate held steady at 5.8%, matching the forecast. The excellent Nonfarm Payrolls should help the Fed remain on course for a rate hike in the first half of 2015.

Last week, ECB head Mario Draghi announced a “wait and see” approach to stimulus, saying that he had no plans to implement quantitative easing for the time being and that the ECB would review its stimulus program in early 2015. The euro shot up about 130 points following the news, although it later gave back some of these gains. The ECB also downgraded its forecasts for growth and inflation, and if the Eurozone economy fails to improve, there is a reasonable likelihood that the ECB will embark on the QE route. Meanwhile, there was some unexpected good news from Germany on Friday, as Factory Orders climbed 2.5% in October, marking a three-month high. This is easily beat the forecast of a 0.6% gain.

EUR/USD for Tuesday, December 9, 2014

EUR/USD December 9th 10:10 GMT

EUR/USD 1.2346 H: 1.2367 L: 1.2292

EUR/USD Technical

• EUR/USD was uneventful in the Asian session. The pair has posted slight gains in European trade.
• 1.2407 is a weak resistance line. 1.2518 is stronger.
• 1.2286 has reverted to a support role after starting the week as resistance. 1.2143 is next.
• Current range: 1.2286 to 1.2407

Further levels in both directions:

• Below: 1.2286, 1.2143, 1.2042, 119.26 and 118.02
• Above: 1.2407, 1.2518, 1.2688 and 1.2806

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in short positions on Tuesday. This is not consistent with the pair’s movement, as the euro has posted small gains. The ratio is pointing to a split between short long positions, indicative of a lack of trader bias as to what direction the pair will take next.

EUR/USD Fundamentals

• 7:00 German Trade Balance. Estimate 18.1B. Actual 20.6B.
• 7:45 French Governor Budget Balance. Estimate -84.7B.
• 7:45 French Trade Balance. Estimate -4.5B. Actual -4.6B.
• All Day – ECOFIN Meetings.
• 12:30 US NFIB Small Business Index. Estimate 96.6 points.
• 15:00 US JOLTS Job Openings. Estimate 4.81M.
• 15:00 US IBD/TIPP Economic Optimism. Estimate 47.2 points.
• 15:00 US Wholesale Inventories. Estimate 0.1%.

* 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.