EUR/USD – Euro Pushes Above 1.09

EUR/USD is showing slight gains on Monday, as the pair trades slightly above the 1.09 line in the European session. The markets are back to work after a light week to wrap up 2015. In economic news, Eurozone Manufacturing PMIs were positive, as most beat their estimates. We’ll get a look at German CPI later in the day. In the US, today’s key event is ISM Manufacturing PMI. The markets are expecting a slight improvement, with an estimate of 49.1 points.

It’s been a roller coaster end to 2015 for the euro. The continental currency suffered a dismal month of November, coughing up about 450 points. However, EUR/USD has rebounded in impressive fashion, having recovered most of these losses in December. The euro has managed to post sharp gains even with the Federal Reserve rate hike, which is likely the first of a series of incremental rate hikes in 2016. However, the euro will be hard pressed to remain at current levels, if inflation and growth in the Eurozone do not show signs of improvement.

US releases signed off on 2015 with mixed results. Pending Home Sales was unexpectedly soft, posting a decline of 0.9%, compared to an estimate of a 0.6% gain. Recent housing indicators have missed expectations, pointing to weakness in the US housing sector. Meanwhile, CB Consumer Confidence sparkled in the December report, as the key indicator jumped to 96.5 points, up sharply from 90.4 points a month earlier. This easily beat the estimate of 93.9 points. This excellent reading followed a solid UoM Consumer Sentiment, which improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high. Consumer confidence indicators are closely monitored by analysts, as stronger consumer confidence often translates into increased consumer spending, a key driver of economic growth. Strong consumer demand has been an important factor in the strength of the US economy, which led to the historic rate hike by the Federal Reserve in December.

EUR/USD Fundamentals

Monday (Jan. 4)

  • All Day German Preliminary CPI. Estimate 0.2%
  • 8:15 Spanish Manufacturing PMI. Estimate 53.1 points. Actual 53.0 points
  • 8:45 Italian Manufacturing PMI. Estimate 54.9 points. Actual 55.6 points
  • 8:50 French Final Manufacturing PMI. Estimate 51.6 points. Actual 51.4 points
  • 8:55 German Final Manufacturing PMI. Estimate 53.0 points. Actual 53.2 points
  • 9:00 Eurozone Final Manufacturing PMI. Estimate 53.1 points. Actual 53.2 points
  • 14:45 US Final Manufacturing PMI. Estimate 51.1 points.
  • 15:00 US ISM Manufacturing PMI. Estimate 49.1 points
  • 15:00 US Construction Spending. Estimate 0.7%
  • 15:00 US ISM Manufacturing Prices. Estimate 36.5 points

EUR/USD for Monday, January 4, 2016

EUR/USD January 4 at 10:30 GMT

EUR/USD 1.0918  H: 1.0945 L: 1.0827

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0659 1.0732 1.0847 1.0941 1.1087 1.1172
  • The pair has posted slight gains in the Asian and European sessions.
  • 1.0941 remains a weak resistance line.
  • 1.0847 is providing support.
  • 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, 1.1172 and 1.1278

OANDA’s Open Positions Ratio

In the EUR/USD ratio, short positions command a strong majority (59%). This is indicative of trader bias towards the euro moving downwards.

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.