EUR/USD – Euro Steady as Eurozone, German Mfg. PMIs Meets Expections

EUR/USD has edged upwards in the Thursday session, as the pair trades at 1.0625. On the release front, it’s a very busy day. German and Eurozone Manufacturing PMIs both pointed to expansion, with readings of 54.4 and 53.7 respectively. The Eurozone unemployment rate dipped to 9.8%, beating the forecast of 10.0%. In the US, there are two key events – unemployment claims and ISM Manufacturing PMI. US employment indicators will be in the spotlight on Friday, highlighted by Nonfarm Payrolls. The indicator is expected to climb to 165 thousand.

There was some good news out of the Eurozone on Thursday. German and Eurozone manufacturing reports indicate expansion in the manufacturing sector, and the unemployment rate dropped to 9.8%, its lowest level since December 2011. On the inflation front, Eurozone CPI Flash Estimate continued to rise, gaining 0.6% in November. This is a significant improvement from the first half of the year, when this inflation index posted four consecutive declines. Still, inflation remains well below the ECB target of 2.0%, despite record low interest rates pegged at 0.00%. Earlier this week, Draghi said that the Eurozone growth had been “moderate but steady” despite the effects of global economic and political uncertainty. Draghi also said that he expected the economy’s recovery to continue. The ECB holds a policy meeting next week and is expected to maintain rates at current levels.

US numbers sparkled on Tuesday, as GDP and consumer confidence data pointed upwards. Preliminary GDP sparkled in the third quarter, as the economy expanded 3.2%, above the forecast of 3.0%. The 3.2% gain was an upwards revision of Advance GDP, which came in at 2.9%. Solid consumer confidence numbers have been a critical factor in the US recovery, as an optimistic consumer is likely to go out and spend money. CB Consumer Confidence jumped to 107.1 points in November, surpassing the 100-level for the third time in four months. Last week, UoM Consumer Sentiment jumped to 93.8 points, its highest level since May. Donald Trump’s surprise election victory has not had an adverse effect on consumer confidence, and if these rosy numbers translate into stronger consumer spending, the US dollar could continue to climb against its rivals.

US Q3 GDP Revised Upward on Consumer Spending

EUR/USD Fundamentals

Thursday (December 1)

  • 8:15 Spanish Manufacturing PMI. Estimate 53.7. Actual 54.5
  • 8:45 Italian Manufacturing PMI. Estimate 51.4. Actual 52.2
  • 8:50 French Manufacturing PMI. Estimate 51.5. Actual 51.7
  • 8:55 German Manufacturing PMI. Estimate 54.4. Actual 54.3
  • 9:00 Eurozone Final Manufacturing PMI. Estimate 53.7. Actual 53.7
  • 9:00 Italian Monthly Unemployment Rate. Estimate 11.6%. Actual 11.6%
  • 10:00 Eurozone Unemployment Rate. Estimate 10.0%. Actual 9.8%
  • Tentative – Spanish 10-year Bond Auction. Actual 1.54%
  • 12:30 US Challenger Job Cuts.
  • 13:30 US Unemployment Claims. Estimate 252K
  • 14:45 US Final Manufacturing PMI. Estimate 53.9
  • 15:00 US ISM Manufacturing PMI. Estimate 52.1
  • 15:00 US Construction Spending. Estimate 0.6%
  • 15:00 US ISM Manufacturing Prices. Estimate 52.0
  • 15:30 US Natural Gas Storage. Estimate -52B
  • All Day – US Total Vehicle Sales

Upcoming Key Events

Friday (December 2)

  • 13:30 US Average Hourly Earnings. Estimate 0.2%
  • 13:30 US Nonfarm Employment Change. Estimate 165K
  • 13:30 US Unemployment Rate. Estimate 4.9%

*All release times are GMT

* Key events are in bold

EUR/USD for Thursday, December 1, 2016

EUR/USD December 1 at 10:20 GMT

Open: 1.0590 High: 1.0638 Low: 1.0588 Close: 1.0625

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0414 1.0506 1.0616 1.0708 1.0821 1.0957
  • EUR/USD was flat in the Asian session and has posted small gains in European trade
  • 1.0616 remains busy and is under strong pressure as a support line
  • 1.0708 is the next resistance line

Further levels in both directions:

  • Below: 1.0616, 1.0506, 1.0414 and 1.0287
  • Above: 1.0708, 1.0821 and 1.0957
  • Current range: 1.0616 to 1.0708

OANDA’s Open Positions Ratio

EUR/USD ratio remains unchanged this week. Currently, short positions have a majority (65%), indicative of trader bias towards EUR/USD breaking out and moving 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

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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