EUR/USD – Euro Steady as Markets Eye Draghi Speech

The euro has ticked lower in the Wednesday session, as the pair trades at 1.0870. On the release front, French data was better than expected. Industrial production posted a gain of 2.0%, above the estimate of 1.2%. France’s trade deficit improved to EUR -5.4 billion, better than the forecast of EUR -5.9 billion. The markets are keeping a close eye on ECB President Mario Draghi, who will speak about monetary policy in the Dutch House of Representatives. There are no major releases out of the US. On Thursday, PPI is expected to show a slight gain of 0.2%, and unemployment claims is forecast to climb to 245 thousand.

Industrial production and manufacturing numbers have long been weak points in the eurozone economy, but first quarter data is showing considerable improvement in France and Germany. French industrial production jumped 2.0% in March, ending a streak of three consecutive declines. The Markit France Manufacturing PMI rose to 55.1 in April, its highest level since 2011. In Germany, industrial production in March declined 0.4%, but this was just a blip, as industrial production in the first quarter posted a respectable gain of 1.6%. German Factory Orders came in at 1.0%, above the forecast of 0.7%. An improvement in global economic conditions has revived the demand for eurozone exports, notably cars and machinery. A weak euro has made European exports more attractive and helped boost the manufacturing sector. Germany releases Preliminary GDP for the first quarter on Friday, with the markets predicting a gain of 0.6%. If the GDP report is stronger than expected, the euro could reverse directions and gain ground.

President Donald Trump has raised many eyebrows in his first 100 days in office, but political Washington is stunned after Trump abruptly fired FBI director James Comey on Tuesday. Comey had been conducting an investigation into possible collusion between Trump and Russia during the presidential campaign. The White House has claimed that it fired Comey over his handling of an email scandal involving Hillary Clinton, but the move has been roundly condemned by the Democrats, and some key Republicans have also voiced opposition as well. The political firestorm could heat up further, with calls in Congress to appoint a special prosecutor into Trump’s connections with Russia. The dollar has already recorded some losses since the firing, and the currency could head lower if investors get jittery about Donald Trunp’s latest escapade.

EUR/USD Fundamentals

Wednesday (May 10)

  • 2:45 French Industrial Production. Estimate 1.2%. Actual 2.0%
  • 2:45 French Trade Balance. Estimate -5.9B. Actual -5.4B
  • 4:00 Italian Industrial Production. Estimate 0.3%. Actual 0.4%
  • 8:00 ECB President Mario Draghi Speaks
  • 8:30 US Import Prices. Estimate 0.2%
  • 10:30 US Crude Oil Inventories. Estimate -2.0M
  • 13:01 US 10-y Bond Auction
  • 14:00 US Federal Budget Balance. Estimate 175.0B

Thursday (May 11)

  • 2:00 German WPI. Estimate 0.1%
  • 4:00 ECB Economic Bulletin
  • 5:00 EU Economic Forecasts
  • 6:25 FOMC Member William Dudley Speaks
  • 8:30 US PPI. Estimate 0.2%
  • 8:30 US Unemployment Claims. Estimate 245K
  • 8:30 US Core PPI. Estimate 0.2%
  • 11th-12th US Mortgage Delinquencies
  • 10:30 US Natural Gas Storage. Estimate 52B
  • 13:01 US 30-y Bond Auction

*All release times are EDT

*Key events are in bold

EUR/USD for Wednesday, May 10, 2017

EUR/USD Wednesday, May 10 at 5:50 EDT

Open: 1.0886 High: 1.0898 Low: 1.0864 Close: 1.0869

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0506 1.0616 1.0708 1.0873 1.0985 1.1122

EUR/USD was flat in the Asian session and has edged lower in European trade

  • 1.0708 is providing support
  • 1.0873 was tested earlier and is weak line

Further levels in both directions:

  • Below: 1.0708, 1.0616 and 1.0506
  • Above: 1.0873, 1.0985, 1.1122 and 1.1242
  • Current range: 1.0708 to 1.0873

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged in the Wednesday session. Currently, long positions have a majority (61%), indicative of EUR/USD breaking out and  moving to lower 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.

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.