EUR/USD – Euro Rebounds, Pushes Above 1.09

EUR/USD continues to move higher, as the pair has posted gains on Wednesday. In the European session, EUR/USD is trading at 1.0930. It’s been a busy time for the euro. After racking up gains of over 300 points last week, the currency reversed directions and dropped below the 1.08 line. EUR/USD has shifted directions yet again, and is currently trading higher than its close after the huge surge. Taking a look at economic events, the German trade surplus improved to EUR 20.8 billion, beating expectations. There are no major US releases on the schedule, so the markets will be keeping a close eye on Unemployment Claims, which will be released on Thursday.

German numbers have been a mix this week. Industrial Production posted a weak gain of 0.2% in October. Prior to this reading, the indicator had looked awful, recording three declines in the past four readings. The October figure was well short of market expectations, as the estimate stood at 0.8%. There was better news on Thursday, as the trade surplus improved to EUR 20.8 billion, easily beating the forecast of EUR 19.2 billion. We’ll get a look at German CPI and WPI on Friday, with small gains expected from both inflation indicators.

Recent US job numbers have been positive, so a weak reading from JOLTS Jobs Openings came as a rude surprise to the markets. The important employment indicator slipped to 5.38 million, sharply lower than the previous month’s reading of 5.53 million. This soft figure was way off the estimate of 5.59 million. Still, one disappointing employment release is unlikely to deter the Federal Reserve from proceeding with an expected rate hike at the policy meeting on December 16. The US will release key data later in the week, including CPI and PPI. Persistently low inflation levels have weighed on the US economy and are well below the Fed target of 2 percent, and is a key reason why the Fed did not raise rates earlier this year. However, Yellen stated that she expects inflation numbers to improve, so weak inflation is unlikely to be an impediment to the FOMC approving a rate hike, which has not occurred in over nine years.

EUR/USD Fundamentals

Wednesday (Dec. 9)

• 7:00 German Trade Balance. Estimate 19.2B. Actual 20.8B
• 15:00 US Wholesale Inventories. Estimate 0.2%
• 15:30 US Crude Oil Inventories. Estimate 0.7M
• 18:01 US 10-year Bond Auction

Thursday (Dec. 10)

• 13:30 US Unemployment Claims. Estimate 266K

*Key releases are highlighted in bold

*All release times are GMT

EUR/USD for Wednesday, December 9, 2015

EUR/USD December 9 at 10:40 GMT

EUR/USD 1.0935 H: 1.0945 L: 1.0878

EUR/USD Technical

• EUR/USD has shown slight gains in the Asian and European sessions.
• 1.0847 has strengthened in support following recent gains by the euro.
• 1.0941 was tested in resistance earlier and is under strong pressure.
• Current range: 1.0847 to 1.0941

Further levels in both directions:

• Below: 1.0847, 1.0732 and 1.0659
• Above: 1.0941, 1.1087 and 1.1172

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged, consistent with a lack of significant movement by the pair. Long positions are currently a minority (41%), indicative of trader bias towards the euro continuing to lose ground.

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.