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EUR/USD – Steady at 1.12, Markets Eye US Jobs Report

EUR/USD has posted slight gains on Tuesday, as the pair trades at the 1.12 line in the European session. On the release front, German Industrial Production disappointed, posting a decline of 1.2%. Today’s key event is US JOLTS Job Openings, with the markets expecting a reading of 5.43 million, which would be a slight drop from the previous release. On Wednesday, Fed Chair Janet Yellen will testify before the House Financial Services Committee in Washington. With the markets looking for clues regarding the timing of another rate hike, this event could be a market-mover.

As the largest economy in the Eurozone, Germany is considered the locomotive of the bloc, so German releases are closely monitored by the markets. German manufacturing numbers continue to disappoint, as Industrial Production came in at -1.2%, compared to a forecast of +0.2%. This was the indicator’s fourth decline in the past five months. The soft reading comes on the heels of the December report for German Factory Orders, which posted a decline of 0.7%, compared to a gain of 1.5% a month earlier. China is one of Germany’s largest trade partners, so the downturn which has gripped the Asian giant, the world’s No. 2 economy, has produced strong ripples across the globe and taken its toll on the German and Eurozone manufacturing sectors. The contagion of the Chinese downturn could easily spread to other sectors of the German economy, which could weaken the high-flying euro.

The euro has surged in February, climbing some 330 points last week. This marked the pair’s strongest weekly gain since March 2015, as the euro trades at the 1.12 level. Eurozone numbers have not been particularly impressive, but the euro took full advantage of soft US numbers last week, as employment and service sector numbers were short of expectations. ISM Non-Manufacturing PMI, a key gauge of the services sector. The index dipped to 53.2 points in January, its worst showing since March 2014. Unemployment claims rose unexpectedly to 285 thousand, above the forecast of 279 thousand. The week wrapped up with a dismal Nonfarm Payrolls report, with a small gain of 151 thousand. The markets had expected a much stronger gain of 189 thousand. No less worrying, this figure marks a sharp drop from the previous reading of 292 thousand. The soft labor data continued on Monday, as the Labor Market Conditions Index posted an unimpressive reading of 0.4 points, marking a four-month low.

EUR/USD Fundamentals

Tuesday (Feb. 9)

Upcoming Key Events

Wednesday (Feb. 10)

*Key events are in bold

*All release times are EST

EUR/USD for Tuesday, February 9, 2016

EUR/USD February 9 at 6:00 EST

Open: 1.1189 Low: 1.1162 High: 1.1237 Close: 1.1207

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0941 1.1087 1.1172 1.1278 1.1349 1.1495

Further levels in both directions:

OANDA’s Open Positions Ratio

EUR/USD is almost unchanged, consistent with a lack of movement from the pair. Short positions retain a strong majority of positions (62%). This points to trader bias towards the euro breaking out and heading lower.

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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