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EUR/USD – Euro Weakens on Soft German, Euro Economic Sentiment

EUR/USD has lost ground on Tuesday, as the pair trades in the mid-1.33 range. On the release front, the German and Euro confidence indicators slid last month and were well below expectations. German ZEW Economic Sentiment slipped to 8.6 points, while the Eurozone ZEW Economic Sentiment dropped to 23.7 points. In the US, today’s key event is JOLTS Job Openings, an important employment indicator.

German ZEW Economic Sentiment, a key release, took a tumble in July, falling to just 8.6 points, down from 27.1 points a month earlier, and its lowest level since November 2012. The estimate stood at 18.2 points. This is the latest figure in a string of weak German releases. Last week, the trade surplus narrowed and manufacturing numbers missed expectations. With economic indicators pointing downward and confidence in the German economy ebbing, we could see a decline in German GDP in the second quarter, which would likely have a chilling effect on the shaky euro. Eurozone ZEW Economic Sentiment followed suit, slipping to 23.7 points, compared to 48.1 points in the previous release. The markets had expected a reading of 41.3 points.

In the US, employment indicators are under the market microscope, as the strength of the labor market is one of the most important factors influencing the Federal Reserve regarding the timing of an interest rate hike. A rate hike is expected by mid-2015, but stronger economic data, especially on the employment front, could hasten a rate move. We’ll get a look at JOLTS Jobs Openings later on Tuesday. The indicator has been on an upswing and exceeded the estimate in the past two releases. Another rise is expected in the July release, with the estimate standing at 4.74 million.


EUR/USD for Tuesday, August 12, 2014

EUR/USD August 12 at 9:30 GMT

EUR/USD 1.3342 H: 1.3383 L: 1.3343


EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3104 1.3175 1.3295 1.3346 1.3487 1.3585


Further levels in both directions:


OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in long positions in Tuesday trade, reversing the direction seen a day earlier. This is not consistent with the pair’s movement, as the euro has posted losses. The ratio has a majority of long positions, indicative of trader bias towards the euro reversing course and moving to higher ground.


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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