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EUR/USD – Thin Trading Ahead of US Holiday

EUR/USD has edged higher in Thursday trading, as the pair trades just under the 1.36 line. In economic releases, US Unemployment Claims looked sharp for the second straight week, but manufacturing releases were weak. US markets are closed on Thursday for the Thanksgiving holiday, so we could see a quiet day from EUR/USD. Over in the Eurozone, German Unemployment Change disappointed the markets, with a reading which was higher than expected.

For a second straight week, US Unemployment Claims dropped and came in lower than market expectations, although the euro managed to hold its own despite this. With increasing speculation about a QE taper, employment releases will remain under the market microscope. If employment numbers continue to improve, we can expect the Fed to scale down QE early in 2014, which would likely give a big boost to the US dollar.

In Germany, Unemployment Change moved upwards in October, increasing by 10 thousand claims. The markets had expected no change in the reading. The country’s unemployment rate remained at 6.9%, better than other members of the Eurozone but considered high for Germany, the region’s largest economy. Recent German indicators have looked strong, as Consumer Climate hit a multi-year high, and Business Climate and PMIs beat their estimates. Meanwhile, German Chancellor Angela Merkel’s CDU party has reached an agreement with the Social Democrats to form a coalition, two months after her victory in national elections. This will be her third term in office. Merkel has been opposed to joint liability for Eurozone members in debt, and this policy will likely continue under the new government.

We’ve heard plenty about the lack of inflation and growth in the Eurozone, and the ECB is considering further monetary action to shake the economy out of its slumber. Despite all this, the euro continues to look sharp, and has gained about 250 points against the US dollar in the last two weeks. However, the euro still is well below the levels we saw in late October, when EUR/USD was trading around 1.38.

 

EUR/USD for Thursday, November 28, 2013

Forex Rate Graph 21/1/13

EUR/USD November 28 at 10:50 GMT

EUR/USD 1.3598 H: 1.3618 L: 1.354

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3410 1.3500 1.3585 1.3649 1.3786 1.3893

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

EUR/USD ratio is showing gains in long positions in Thursday trading. This is reflected in the pair’s movement, as the euro continues has posted slight gains. A large majority of the open positions remain short, indicative of a trader bias towards the dollar reversing direction and posting gains against the euro.

The pair remains close to the 1.36 line. With the US markets closed for Thanksgiving, we can expect limited movement from EUR/USD during the North American session.

 

EUR/USD Fundamentals

 

*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.

 

 

Kenny Fisher

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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