- MarketPulse - https://www.marketpulse.com -

EUR/USD – Lower on Weak European PMIs

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 Technical

S1 S2 S1 R1 R2 R3
1.1802 1.1926 1.2042 1.2143 1.2286 1.2407


Further levels in both directions:


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.

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

Latest posts by Kenny Fisher (see all [4])