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EUR/USD – German and Euro Mfg. PMIs Beat Expectations, Euro Unchanged

The euro is unchanged in the Tuesday session, after starting the week with losses. Currently, EUR/USD is trading at 1.1760, up 0.09% on the day. On the release front, German and European Manufacturing PMIs were sharp. German Flash Manufacturing PMI ticked lower to 60.5, beating the estimate of 60.1 points. Eurozone Manufacturing PMI improved to 58.6, easily beating the estimate of 57.9 points. There are no major US events on the schedule. On Wednesday, Germany releases Ifo Business Climate, and the US will publish US Core Durable Goods Orders.

The crisis in Catalonia has entered its third week, and with the central and Catalan governments entrenched in their positions, the worst may be yet to come. On Saturday, the central government said it would imposing direct rule, invoking Article 155 of the Spanish Constitution. However, there is plenty of uncertainty, as this clause has never been used. Madrid has said it will remove Catalan President Carles Puigemont from power, take over the media and hold new elections for the region. Unsurprisingly, the Catalan government has condemned this latest salvo and has called for “massive civil disobdience”. Developments are unfolding daily, and investors are nervously watching the trouble in Spain, the eurozone’s fourth largest economy. The European Union has refused to intervene, calling the crisis an internal matter. So far, the woes in Catalonia have not affected the euro.

The eurozone economy has been performing well, with much of the credit going to a robust manufacturing sector in Germany and the eurozone. This was underscored on Tuesday, as manufacturing PMIs were strong and continue to point to expansion. The manufacturing sector remains solid, as global demand for European exports remains strong and consumer spending has been steady. German and European Services PMIs both missed their estimates, but still indicated expansion in the services sector.

Investors Look for Guidance [1]

The Brexit clock is ticking, with Britain leaving the European Union in March 2019. However, negotiations between the parties have foundered, as the sides remain far apart on a number of key issues, including the size of Britain’s bill when it says goodbye to the club. Prime Minister May addressed the 27 EU leaders last week in Brussels, imploring the European to show some flexibility. This didn’t prevent the EU leaders from stating that trade negotiations with Britain would not commence until more progress is made on non-trade matters. Prime Minister May has a razor-thin majority in parliament, and adding to the mix, there are sharp divisions in her cabinet regarding Brexit, with some senior ministers in favor of taking a hard stance and leaving the EU without an agreement if the Europeans fail to soften their position.

EUR/USD Fundamentals

Tuesday (October 24)

Wednesday (October 25)

*All release times are GMT

*Key events are in bold

EUR/USD for Tuesday, October 24, 2017

EUR/USD Tuesday, October 24 at 6:25 EDT

Open: 1.1750 High: 1.1770 Low: 1.1743 Close: 1.1760

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1489 1.1611 1.1712 1.1876 1.1996 1.2092

EUR/USD edged upwards in the Asian session but has given up these gains in European trade

Further levels in both directions:

OANDA’s Open Positions Ratio

EUR/USD is showing movement towards long positions. Currently, short positions have a majority (59%), indicative of EUR/USD breaking out and moving to lower ground.

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 [5]

Market Analyst at OANDA [6]
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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