EUR/USD has started the New Year with losses, as the pair trades in the mid-1.20 range in the European session. On the release front, European Manufacturing PMIs missed their estimates. Today’s highlight out of the US is the ISM Manufacturing PMI, with the markets expecting a drop in the December reading.
Manufacturing releases are in the spotlight on Friday. Spanish Manufacturing PMI edged down to 53.8 points, short of the estimate of 54.9. Italian Manufacturing PMI came in at 48.4, its third straight reading below the 50-point level, which separates between expansion and contraction. Eurozone Manufacturing PMI improved to 50.6, close to the estimate of 50.8. In the US, the markets are expecting a weaker reading for December, with an estimate of 57.6 points. We’ll get a look at Services PMIs early next week.
The euro began 2014 in great shape, trading at 1.37 against the US dollar. However, EUR/USD tumbled over the course of the year, as the euro finds itself at the 1.21 mark as we head into 2015. This marks the euro’s biggest annual drop since 2005. The Eurozone’s woes have become a familiar broken record of low growth, rock bottom inflation and high unemployment. The ECB cut rates to a record low of 0.05% but this failed to kick-start the economy. The harsh economic reality engulfing the Eurozone means that ECB head Mario Draghi may be forced to use his trump card of quantitative easing, early in 2015. This step would further weaken the wobbly euro, and analysts are forecasting that the currency will continue to lose ground in the first quarter of 2015.
EUR/USD for Friday, January 2, 2015
EUR/USD for Friday, January 2, 2015 at 10:00 GMT
EUR/USD 120.51 H: 1.2058 L: 1.2042
- EUR/USD posted losses in the Asian session, testing support at 1.2042. The pair is unchanged in the European session.
- On the downside, 1.2042 is under strong pressure. Will the pair break below this support level? 1.1926 is stronger.
- 1.2143 has strengthened in resistance as the pair trades at lower levels.
- Current range: 1.2042 to 1.2143
Further levels in both directions:
- Below: 1.2042, 119.26, 118.02 and 1.1638
- Above: 1.2143, 1.2286, 1.2407, 1.2518 and 1.2688
OANDA’s Open Positions Ratio
EUR/USD is pointing to gains in short positions on Friday. This is 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 direction and moving to higher ground.
- 8:15 Spanish Manufacturing PMI. Estimate 54.9 points. Actual 53.8 points.
- 8:45 Italian Manufacturing PMI. Estimate 49.6 points. Actual 48.4 points.
- 9:00 Eurozone Final Manufacturing PMI. Estimate 50.8 points. Actual 50.6 points.
- 14:45 US Final Manufacturing PMI. Estimate 54.1 points.
- 15:00 US ISM Manufacturing PMI. Estimate 57.6 points.
- 15:00 US Construction Spending. Estimate 0.4%.
- 15:00 US ISM Manufacturing Prices. Estimate 43.1 points.
*Key releases are highlighted in bold
*All release times are GMT
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