EUR/USD – Euro Steady Ahead of Fed Minutes

EUR/USD is showing limited movement in the Wednesday session. Currently, the pair is trading at 1.0440. On the release front, German and Eurozone Services PMIs both missed their estimates. Eurozone CPI Flash Estimate jumped to 1.1%, edging above the forecast of 1.0%. In the US, today’s highlight is the Federal Reserve minutes from the December meeting. On Thursday, the US releases ISM Non-farm Manufacturing PMI and two key employment indicators – ADP Employment Change and Unemployment Claims.

The New Year has started on a positive note in the Eurozone, as inflation and manufacturing numbers have been solid. CPI Flash Estimate climbed to 1.1% in December, up from 0.6% in the November reading. German Manufacturing PMI improved to 55.6, edging above the forecast of 55.5. Eurozone Manufacturing PMI rose to 54.9, matching the forecast. What is particularly encouraging is that the indicator has now risen over four straight months, pointing to stronger growth in the fourth quarter.

The markets are eagerly awaiting the release of the Federal Reserve minutes from the December policy meeting. At that meeting, the Fed finally raised rates for the first time since December 2015. Analysts will be combing through the minutes, looking for clues regarding future monetary policy. The US economy is performing very well, and the markets are hopeful that this continues as Donald Trump takes office. Trump’s economic policies remain sketchy, although he has promised to increase fiscal spending while lowering taxes. If the economy’s positive momentum continues, the Fed could be inclined to raise rates another quarter point in order to prevent the economy from overheating. If the markets remain bullish about further rate hikes, the US dollar could continue to climb in early 2017.

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EUR/USD Fundamentals

Wednesday (January 4)

  • 8:00 Spanish Unemployment Change. Estimate -44.2K. Actual -86.8K
  • 8:15 Spanish Services PMI. Estimate 54.8. Actual 55.0
  • 8:45 Italian Services PMI. Estimate 52.7. Actual 52.3
  • 8:50 French Final Services PMI. Estimate 52.6. Actual 52.9
  • 8:55 German Final Services PMI. Estimate 53.8. Actual 54.3
  • 9:00 Eurozone Final Services PMI.  Estimate 53.1. Actual 53.7
  • 10:00 Eurozone CPI Flash Estimate. Estimate 1.0%. Actual 1.1%
  • 10:00 Eurozone Core CPI Flash Estimate. Estimate 0.8%. Actual 0.9%
  • 10:00 Eurozone Italian Preliminary CPI. Estimate 0.3%. Actual 0.4%
  • All Day – US Total Vehicle Sales. Estimate 17.8M
  • 19:00 US FOMC Meeting Minutes

Thursday (January 5)

  • 12:30 ECB Monetary Policy Meeting Accounts
  • 13:15 US ADP Nonfarm Employment Change. Estimate 171K
  • 13:30 US Unemployment Claims. Estimate 262K
  • 15:00 US ISM Non-Manufacturing PMI. Estimate 56.6

*All release times are GMT

*Key events are in bold

EUR/USD for Wednesday, January 4, 2017

EUR/USD January 4 at 10:30 GMT

Open: 1.0417 High: 1.0445 Low: 1.0389 Close: 1.0441

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0170 1.0287 1.0414 1.0506 1.0616 1.0708
  • EUR/USD was flat in the Asian session. In European trade, the pair has posted gains
  • 1.0414 was tested earlier in support and remains under pressure
  • 1.0506 is the next resistance line

Further levels in both directions:

  • Below: 1.0414, 1.0287 and 1.0170
  • Above: 1.0506, 1.0616, 1.0708 and 1.0873
  • Current range: 1.0414 to 1.0506

OANDA’s Open Positions Ratio

EUR/USD ratio is showing slight gains in long positions session. Currently,  long positions have a strong majority (61%), indicative of trader bias towards EUR/USD continuing to move upwards.

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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