EUR/USD – Euro Steady as German Manufacturing PMI Improves

EUR/USD has stabilized on Thursday, after recent losses which have pushed the euro below the 1.27 line. On the release front, there was good news out of Germany as Manufacturing PMI improved in September. In Spain, the unemployment rate dipped to 23.7%, its lowest level since Q4 of 2011. In the US, today’s highlight is Unemployment Claims. The markets are expecting another excellent showing, with a forecast of 269 thousand.

Eurozone PMIs are carefully monitored by the markets, as they provide an important gauge of activity in the manufacturing and services sectors. German Manufacturing PMI led the way with a reading of 51.8 points, easily beating the estimate of 49.6 points. French Manufacturing PMI failed to keep pace, slipping to 47.3 points. This was short of the estimate of 48.6 points. Other PMIs met expectations.

The Deutsche Bundesbank issued its monthly report on Monday. The German central bank said that the economy showed little growth in the third quarter, as manufacturing production fell and business confidence weakened. At the same time, employment numbers and consumer spending were higher, so GDP was likely to remain unchanged. As for Q4, the report stated that the outlook is “moderate”. The report underscores weakness in the German economy, long considered the locomotive of Europe. The euro is sensitive to German data, so weak German numbers could hurt the shaky euro.

EUR/USD for Thursday, October 23, 2014

EUR/USD October 23 at 10:15 GMT

EUR/USD 1.2665 H: 1.2670 L: 1.2614

EUR/USD Technical

• EUR/USD was flat in the Asian session and has edged upwards in European trade.
• 1.2688 has reverted to a resistance role after the euro lost ground on Wednesday. This line is likely to see action during the day. 1.2806 is stronger.
• 1.2815 is providing strong support.
• Current range: 1.2518 to 1.2688

Further levels in both directions:

• Below: 1.2518, 1.2407, 1.2286 and 1.2143
• Above: 1.2688, 1.2806, 1.2905, 1.2984 and 1.3104

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in long positions on Thursday. This is consistent with the pair’s movement, as the euro has posted small gains. The ratio has a majority of long positions, indicative of trader bias towards the euro moving higher.

EUR/USD Fundamentals

• 7:00 French Flash Manufacturing PMI. Estimate 48.6 points. Actual 47.3 points.
• 7:00 French Flash Services PMI. Estimate 48.2 points. Actual 48.1 points.
• 7:00 Spanish Unemployment Rate. Estimate 24.1%. Actual 23.7%.
• 7:30 German Flash Manufacturing PMI. Estimate 49.6 points. Actual 51.8 points.
• 7:30 German Flash Services PMI. Estimate 55.0 points. Actual 54.8 points.
• 8:00 Eurozone Flash Manufacturing PMI. Estimate 50.0 points. Actual 50.7 points.
• 8:00 Eurozone Flash Services PMI. Estimate 52.0 points. Actual 52.4 points.
• Day 1 – EU Economic Summit.
• 12:30 US Unemployment Claims. Estimate 269K.
• 13:00 US HPI. Estimate 0.4%.
• 13:45 US Flash Manufacturing PMI. Estimate 57.2 points.
• 14:00 US Consumer Confidence. Estimate -12 points.
• 14:00 US CB Leading Index. Estimate 0.8%
• 14:30 US Natural Gas Storage. Estimate 97B.

*All release times are GMT

*Key releases are highlighted in bold.

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