EUR/USD is steady in Monday trading, as the pair trades in the low-1.37 range. The euro had an excellent week, gaining close to 200 points against the US dollar. Eurozone releases did not look impressive on Monday, as German Trade Balance and Industrial Production were weak and came in well below their estimates. As well, Eurozone Sentix Investor Confidence dropped in November. Over in the US, today’s only event is a speech by FOMC Member James Bullard on monetary policy in St. Louis. On Friday, US releases impressed, as Non-Farm Payrolls and the Unemployment Rate were sharp, while UoM Preliminary Consumer Sentiment hit a five-month high.
As the largest economy in the Eurozone, Germany’s economic releases are closely monitored by the markets. Monday’s numbers were sluggish, as the trade surplus shrunk to 16.8 billion euros, down from 18.8 billion in the previous release. This was well below the estimate of 17.4 billion. Industrial Production brought no relief, posting its third decline in four months. The November drop of 1.2% surprised the markets, which had expected a gain of 0.8%. The euro remained steady despite these weak figures.
US employment numbers continue to look strong last week. After another strong Unemployment Claims release, Non-Farm Payrolls was almost unchanged, coming in at 203 thousand. This was well above the estimate of 180 thousand. The Unemployment Rate dropped from 7.3% to 7.0%, beating the estimate of 7.2%. The strong numbers are sure to increase the pressure on the Fed to taper QE when its meets later in December. The Fed has said that a stronger employment picture is a prerequisite to tapering, and last week’s numbers certainly increase the possibility of the Fed taking action at its December policy meeting.
As expected, the ECB held course on Thursday and did not reduce interest rates, which remain at the record low of 0.25%. As well, the deposit rate remains at 0.0%. At a follow-up press conference, ECB head Mario Draghi said that the Bank would continue its accommodative policy stance and that interest rates would remain at current or lower levels for some time. He noted that there had been some discussion at the policy meeting about lowering the deposit rate. As for projected growth for the Eurozone, Draghi said that the ECB forecast for 2013 remains at -0.4%, with the 2014 prediction revised slightly higher, up to 1.1% growth from 1.0%. The euro improved sharply, gaining close to one cent on Thursday.
EUR/USD for Monday, December 9, 2013
EUR/USD December 9 at 11:40 GMT
EUR/USD 1.3720 H: 1.3729 L: 1.3695
- EUR/USD has edged higher in Monday trading, with the pair staying close to the 1.37 in the Asian and European sessions.
- On the downside, 1.3649 continues to provide support. This is followed by support at 1.3585.
- The pair is facing resistance at 1.3786. This is followed by a resistance line at 1.3893, which has remained intact since October 2011.
- Current range: 1.3649 to 1.3786
Further levels in both directions:
- Below: 1.3649, 1.3585, 1.3500, 1.3410 and 1.3325
- Above: 1.3786, 1.3893, 1.4000 and 1.4140
OANDA’s Open Positions Ratio
EUR/USD ratio is pointing to gains in long positions in Monday trading. This is reflected in the pair, with the euro showing slight gains against the dollar. A large majority of the open positions remain short, indicative of a trader bias towards the dollar reversing directions and posting gains against the euro.
The pair is trading quietly on Monday and this could continue during the day, as no US data is being released on Monday.
- EUR/USD Fundamentals
- 7:00 German Trade Balance. Estimate.17.4B. Actual 16.8B.
- 9:30 Eurozone Sentix Investor Confidence. Estimate 10.5 points. Actual 8.0 points.
- 11:00 German Industrial Production. Estimate 0.8%. Actual -1.2%.
- All Day – Eurogroup Meetings.
- 18:05 FOMC Member James Bullard Speaks.
*Key releases are highlighted in bold
*All release times are GMT