EUR/USD – Listless As Services PMIs Up, Retail Sales Down

EUR/USD continues to have an uneventful week, showing little activity on Wednesday. In the European session, the pair is trading in the low-1.35 range. Eurozone releases were a mix on Wednesday. Service PMIs from Spain, Italy and the Eurozone were solid, as all three showed improvement in January. However, Eurozone Retail Sales was a big disappointment, posting a decline of 1.6%. In the US, there’s plenty of action today, led by two key releases – ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI.

Eurozone PMIs for January continue to look good. The Spanish and Eurozone releases came in above the 50-point line, pointing to expansion. Italian Services PMI also improved, but remains in contraction mode. These numbers come on the heels of Manufacturing PMIs which also looked solid. At the same time, Eurozone Retail Sales slipped 1.6%, well off the estimate of a 0.7% decline. This key consumer spending indicator has posted declines in three of the past four readings, pointing to weak consumer spending, which is a key component of economic growth.

Eurozone inflation indicators continue to point to weak inflation, well below the ECB target of 2.0%. The persistent low levels are indicative of  underperforming economies in the Eurozone, which is weighing on the euro. Will the ECB take action or hold the course? We’ll get an answer on Thursday, when the ECB sets its benchmark interest rate for February.

In Spain, Unemployment Change jumped to 113 thousand in January, shocking the markets which had expected a decrease. The Spanish employment minister tried to put a positive spin on the data, noting that January unemployment numbers typically climb sharply, and this figure was the lowest January increase since 2007. Recent Spanish data has looked strong, but clearly the staggering unemployment levels will continue to weigh on the economy.

Recent German releases have been pointing upwards, but the impressive streak came to a crashing halt on the last trading day of January. Retail Sales slid by 2.5%, its sharpest drop since October 2012. The markets had expected a weak gain of 0.2%. December releases looked solid, led by Unemployment Change, Consumer Climate and Ifo Business Climate rose, indicating that German businesses and consumers are optimistic about the economy as we begin 2014. Will the weak Retail Sales release prove to be just a blip? Germany is the Eurozone’s largest economy, and the region will need the country to lead the way to economic recovery on the continent.


EUR/USD for Wednesday, February 5, 2014

Forex Rate Graph 21/1/13

EUR/USD February 5 at 11:15 GMT

EUR/USD 1.3513 H: 1.3529 L: 1.3499


EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3267 1.3347 1.3410 1.3585 1.3649 1.3786


  • EUR/USD continues to show little movement in Wednesday trading, staying close to the 1.35 line.
  • 1.3410 continues to provide support. This is followed by a support line at 1.3347.
  • 1.3585 is the first line of resistance. This is followed by resistance at 1.3649.
  • Current range: 1.3410 to 1.3585

Further levels in both directions:

  • Below: 1.3410, 1.3347, 1.3267 and 1.3189
  • Above: 1.3585, 1.3649, 1.3786, 1.3893 and 1.4000


OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged in Wednesday trading. This is reflected in the pair’s current movement, as the euro is showing little movement. Short positions have a majority, indicative of trader bias towards the dollar gaining ground against the euro.

We’re seeing more of the same from EUR/USD, which has been showing little movement throughout the week. With the US releasing key employment and services data later today, we could see some activity from the pair during the North American session.


EUR/USD Fundamentals

  • 8:15 Spanish Services PMI. Estimate 55.3 points. Actual 54.9 points.
  • 8:45 Italian Services PMI. Estimate 48.2 points. Actual 49.4 points.
  • 9:00 Eurozone Final Services PMI. Estimate 51.9 points. Actual 51.6 points.
  • 10:00 Eurozone Retail Sales. Estimate -0.7%/ Actual -1.6%.
  • 13:15 US ADP Non-Farm Employment Change. Estimate 191K.
  • 14:00 US Final Services PMI. Estimate 56.6 points.
  • 15:00 US ISM Non-Farm Manufacturing PMI. Estimate 53.6 points.
  • 15:00 US FOMC Member Daniel Tarullo Speaks.
  • 15:30 US Crude Oil Inventories. Estimate 2.2M.
  • 17:30 US FOMC Member Charles Plosser Speaks.


*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

Market Analyst at OANDA
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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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