EUR/USD – Euro Edges Lower as Euro, German Mfg. Reports Miss Estimates

The euro has edged lower in the Monday session. Currently, EUR/USD is trading at 1.1650. On the release front, it’s a busy day in the eurozone. German and Eurozone Manufacturing PMIs softened in July and missed expectations. In the US, today’s key event is Existing Home Sales, which is expected to drop to 5.59 million. On Tuesday, Germany will release Ifo Business Climate and the US publishes CB Consumer Confidence.

Eurozone and German manufacturing PMIs dropped in July, disappointing the markets. Still the indicators point to continuing expansion in the German and eurozone manufacturing sectors. This is a result of stronger global demand for European exports, as well as an improvement in domestic consumer consumption. The euro enjoyed a strong week, gaining 1.6%. Earlier on Monday, EUR/USD touched a high of 1.1684, its highest level since August 2015. On Thursday, the ECB held the course on monetary policy, keeping interest rates at 0.00% and the bank’s asset-purchase scheme at EUR 60 billion/month. With no news in the rate statement, the markets focused on the ECB President Mario Draghi’s press conference. Draghi sounded upbeat about the eurozone economy, noting there were signs of “unquestionable improvement” in the eurozone economy. Draghi acknowledged that inflation remains stubbornly low, and said that it was a question of time until the stronger economic conditions pushed inflation to higher levels. As for monetary policy, Draghi said the bank had not set an exact time for revisiting any changes to the current accommodative policy, but added that the ECB would review policy in September. These comments did not seem to break any new ground, but were perceived as hawkish by the markets and boosted the euro on Thursday.

It was another rough week for President Trump. Early in the week, Trump’s cherished flagship healthcare proposal, which aims to replace Obamacare, stalled in the Senate after two Republican senators said they would not support the bill. Trump has failed to pass any significant legislation so far in his term, and investors are becoming more skeptical as to whether Trump will have any more success with his tax reform and fiscal spending plans. With the Democrats forming a rock-solid wall of opposition, dissension among Republican lawmakers, many of whom are uneasy about Trump, could doom attempts by the White House to get bills through Congress. There was more bad news as Robert Mueller, the special counsel who is investigating alleged collusion between Trump and Russian officials during the US election, said he would review business transactions involving Trump as well as his associates. Trump has said that Mueller’s scope is limited to Russia, so the stage could be set for a Nixon-type showdown between the president and the special counsel investigating wrongdoing by the president.

EUR/USD Fundamentals

Monday (July 24)

  • 3:00 French Flash Manufacturing PMI. Estimate 54.6. Actual 55.4
  • 3:00 French Flash Services PMI. Estimate 56.6. Actual 55.9
  • 3:30 German Flash Manufacturing PMI. Estimate 59.1. Actual 58.3
  • 3:30 German Flash Services PMI. Estimate 54.4. Actual 53.5
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 57.3. Actual 56.8
  • 4:00 Eurozone Flash Services PMI. Estimate 55.5. Actual 55.4
  • 6:00 German Buba Monthly Report
  • 9:45 US Flash Manufacturing PMI. Estimate 52.3
  • 9:45 US Flash Services PMI. Estimate 54.3
  • 10:00 US Existing Home Sales. Estimate 5.59M

Tuesday (July 25)

  • 4:00 German Ifo Business Climate. Estimate 114.9
  • 10:00 US CB Consumer Confidence. Estimate 116.2

*All release times are GMT

*Key events are in bold

EUR/USD for Monday, July 24, 2017

EUR/USD Monday, July 24 at 5:40 EDT

Open: 1.1681 High: 1.1684 Low: 1.1630 Close: 1.1655

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1465 1.1534 1.1616 1.1712 1.1876 1.1996

EUR/USD inched higher in the Asian session. The pair has reversed directions in European trade and posted slight losses

  • 1.1616 is providing weak support
  • 1.1712 is the next resistance line

Further levels in both directions:

  • Below: 1.1616, 1.1534, 1.1465 and 1.1366
  • Above: 1.1712, 1.1876 and 1.1996
  • Current range: 1.1616 to 1.1712

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged in the Monday session. Currently, short positions have a strong majority (71%), indicative of EUR/USD continuing to move downwards.

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.