EUR/USD – Euro Under 1.06, German Retail Sales Slides

EUR/USD has posted slight losses on Monday, as the pair trades below the 1.06 line in the European session. In economic news, German Retail Sales declined by 0.4%, while Italian Preliminary CPI posted an identical decline. Later in the day, Germany releases its Preliminary CPI report for November. In the US, it’s a quiet day, with just two releases on the calendar – Chicago PMI and Pending Home Sales.

The week started on a sour note in the Eurozone, as German Retail Sales dipped 0.4%, much worse than the  estimate of a 0.3% gain. The indicator, which is the primary gauge of consumer spending, has struggled, posting only one gain in the past five releases. There wasn’t any relief from Italian CPI, which posted a decline of 0.4%, its worst showing since February. Traders should keep a close eye on German CPI, which will be released later on Monday. The markets are expecting a weak gain of 0.1%, and a German CPI reading which misses the forecast could push the euro lower.

It could be a volatile week for the euro, as the markets keep a close eye on the ECB policy meeting on Thursday. ECB head Mario Draghi hinted in October that the ECB could make take monetary measures at its December meeting. With little growth and inflation going nowhere, the markets are expecting Draghi to make some kind of move. Possible scenarios include lowering the deposit rate below the current -0.20% or expanding the current QE program. Either of these steps will likely weigh on the struggling euro, which is trading at its lowest levels since April. There is also talk that the central bank will implement two-tier negative rates on deposits to protect the banking sector.

EUR/USD Fundamentals

Monday (Nov. 30)

  • 7:00 German Retail Sales. Estimate +0.3%. Actual -0.4%
  • All Day – German Preliminary CPI. Estimate 0.1%.
  • 10:00 Italian Preliminary CPI. Estimate -0.2%. Actual -0.4%
  • 14:45 US Chicago PMI. Estimate 54.3 points
  • 15:00 US Pending Home Sales. Estimate 1.6%

Upcoming Key Events

Tuesday (Dec. 1) 

15:00 US ISM Manufacturing PMI. Estimate 50.6 points

*Key releases are highlighted in bold

*All release times are GMT

EUR/USD for Monday, November 30, 2015

EUR/USD November 30 at 11:15 GMT

EUR/USD 1.0567 H: 1.0595 L: 1.0562

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0287 1.0359 1.05 1.0659 1.0732 1.0847
  • EUR/USD remains under pressure in the Asian and European sessions.
  • 1.0659 has strengthened in resistance.
  • 1.0500 is providing support.
  • Current range: 1.0500 to 1.0659

Further levels in both directions:

  • Below: 1.05, 1.0359 and 1.0287
  • Above: 1.0659, 1.0732, 1.0847 and 1.0941

OANDA’s Open Positions Ratio

EUR/USD ratio is showing little movement on Monday. The ratio has a slight majority of long positions, indicative of slight trader bias towards the pair moving higher.

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.