EUR/USD – Euro Improves on Strong Eurozone, German Job Numbers

EUR/USD has posted gains on Tuesday, as the pair trades at the 1.06 line in the European session. In economic news, German job numbers were sharp. Unemployment Change declined by 13 thousand, while the unemployment rate edged lower to 6.3%. The Eurozone unemployment rate followed suit, edging down to 10.7%. The Eurozone released Manufacturing PMIs, which were generally positive. In the US, today’s key release is US ISM Manufacturing PMI, with the estimate standing at 50.6 points.

There was good news on the Eurozone job front on Tuesday, giving the euro a much-needed boost against the US dollar. German unemployment rolls fell by 13 thousand, much better than the forecast of a drop of 4 thousand. The unemployment rate edged down to 6.3%, beating the estimate of 6.4%. The Eurozone unemployment rate dropped to 10.7%, edging below the forecast of 10.8%.

The week started on a sour note in the Eurozone, as German Retail Sales dipped 0.4%, much worse than the estimate of a 0.3% gain. The indicator, which is the primary gauge of consumer spending, has struggled, posting only one gain in the last five months. German CPI posted a weak gain of 0.1%, matching the forecast. In Italy CPI came in at 0.4%, its worst showing since February. Persistently weak inflation levels continue to hobble the Eurozone economy, and could result in the ECB implementing additional stimulus at this week’s key policy meeting.

It could be a volatile week for the euro, as the markets keep a close eye on the ECB policy meeting on Thursday. ECB head Mario Draghi hinted in October that the ECB could make take monetary measures at its December meeting. With little growth and inflation going nowhere, the markets are expecting Draghi to make some kind of move. Possible scenarios include lowering the deposit rate below the current -0.20% or expanding the current QE program. Either of these steps will likely weigh on the struggling euro, which is trading at its lowest levels since April. There is also talk that the central bank will implement two-tier negative rates on deposits to protect the banking sector.

EUR/USD Fundamentals

Tuesday (Dec. 1)

  • 8:15 Spanish Manufacturing PMI. Estimate 51.9 points. Actual 53.1 points
  • 8:45 Italian Manufacturing PMI. Estimate 54.3 points. Actual 54.9 points
  • 8:50 French Final Manufacturing PMI. Estimate 50.8 points. Actual 50.6 points
  • 8:55 German Unemployment Change. Estimate -4K. Actual -13K
  • 8:55 German Unemployment Rate. Estimate 6.4%. Actual 6.3%
  • 8:55 German Final Manufacturing PMI. Estimate 52.6 points. Actual 52.9 points
  • 9:00 Eurozone Final Manufacturing PMI. Estimate 52.8 points. Actual 52.8 points
  • 9:00 Italian Monthly Unemployment Rate. Estimate 11.7%. Actual 11.5%
  • Tentative –  Italian Quarterly Unemployment Rate. Estimate 11.9%
  • 10:00 Eurozone Unemployment Rate. Estimate 10.8%. Actual 10.7%
  • 14:45 US Final Manufacturing PMI. Estimate 52.6 points
  • 15:00 US ISM Manufacturing PMI. Estimate 50.6 points
  • 15:00 US Construction Spending. Estimate 0.5%
  • 15:00 US ISM Manufacturing Prices. Estimate 40.0 points
  • All Day – Total Vehicles Sales. Estimate 18.0M
  • 16:45 US FOMC Member Charles Evans Speaks

Upcoming Key Events

Wednesday (Dec. 2)

  • 13:15 ADP Nonfarm Employment Change. Estimate 191K
  • 17:25 Fed Chair Janet Yellen Speaks

*Key releases are highlighted in bold

*All release times are GMT

EUR/USD for Tuesday, December 1, 2015

EUR/USD December 1 at 12:00 GMT

EUR/USD 1.0598 H: 1.0619 L: 1.0563

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0287 1.0359 1.05 1.0659 1.0732 1.0847
  • EUR/USD was flat in the Asian and has posted slight losses in the European session.
  • 1.0659 remains a weak resistance line.
  • 1.0500 is providing strong support.
  • Current range: 1.0500 to 1.0659

Further levels in both directions:

  • Below: 1.05, 1.0359 and 1.0287
  • Above: 1.0659, 1.0732, 1.0847 and 1.0941

OANDA’s Open Positions Ratio

EUR/USD ratio is showing little movement on Tuesday. The ratio has a slight majority of long positions (54:46), indicative of slight trader bias towards the pair continuing to move higher.

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

Market Analyst at OANDA
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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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