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EUR/USD – Flat After Disappointing Growth Data

The euro is unchanged in Friday’s European session, as EUR/USD trades in the low-1.37 range. Weak GDP numbers are weighing on the currency, which has had an uneventful week after last week’s rollercoaster excitement. On Thursday, US Unemployment Claims were excellent, as the indicator plunged to a seven-year low. Taking a look at Friday’s events, French Preliminary Non-Farm Payrolls came in at -0.1%, matching the estimate. In the US, today’s highlights are Building Permits and the Preliminary UoM Consumer Sentiment.

Eurozone GDP releases, the primary gauge of economic growth, mostly disappointed in April. Eurozone Flash GDP dipped to 0.2%, short of the estimate of 0.3% French and Italian GDP releases both weakened and missed expectations. The one bright note was German Preliminary GDP, which jumped 0.8% in Q1, its best showing since Q1 in 2013. This edged above the estimate of 0.7%.

At last week’s policy meeting, Mario Draghi, the ECB said it would be comfortable taking monetary action in June, the markets jumped, and the euro has been in a tailspin ever since. However, Draghi gave himself plenty of wiggle room, saying the ECB would take into account growth and inflation forecasts before making any moves. Eurozone Core CPI improved to 1.0% in April, up from 0.7% a month earlier. Eurozone CPI followed suit, as it improved to 0.7%, up from 05%. With both inflation indicators matching their estimates and pointing upwards, the ECB has some breathing room before having to take action. If upcoming inflation numbers meet expectations, we could see the ECB play it safe in June and remain on the sidelines yet again.

In the US, Thursday’s employment and manufacturing numbers were strong. Unemployment Claims were outstanding, dropping to 297 thousand last week. This easily beat the estimate of 321 thousand and was the lowest level we’ve seen since May 2007.  On the manufacturing front, the Philly Fed Manufacturing Index dipped to 15.4 points, but this was well above the estimate of 13.9 points. As well, Empire State Manufacturing Index climbed to 19.0 points, crushing the estimate of 5.5. This was the indicator’s best showing in two years.


EUR/USD for Friday, May 16, 2014

Forex Rate Graph 21/1/13

EUR/USD May 16 at 8:45 GMT

EUR/USD 1.3718  H: 1.3725  L: 1.3707


EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3487 1.3585 1.3649 1.3786 1.3893 1.400


Further levels in both directions:


OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged in Friday trading. This is consistent with the pair’s current movement, as the euro is drifting close to the 1.37 line. The ratio runs slightly in favor of long positions, indicative of a slight trader bias towards the euro reversing its downward spiral.

EUR/USD has looked quiet for most of the week, and this is continuing on Friday. The pair is unchanged in the European 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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