EUR/USD – Dips Below 1.20 as German Factory Orders Fall

The euro has started with slight losses in the Monday session. Currently, EUR/USD is trading at 1.1999, down 0.25% on the day. On the release front, German Factory Orders disappointed, with a decline of 0.4%. This was well short of the estimate of a 0.1% gain. In the Eurozone, Sentix Investor Confidence improved to 32.9, above the estimate of 31.5 points. Retail Sales rebounded with a strong gain of 1.5%, beating the estimate of 1.4%. There are no major events out of the US. On Tuesday, Germany releases Industrial Production and Trade Balance. The US will publish JOLTS Job Openings.

The German economy continues to look strong, despite a soft Factory Orders report for December. Retail Sales soared 2.3%, its fastest pace since October 2016. Services and Manufacturing PMIs improved and continue to point to strong expansion. The labor market remains robust, as unemployment rolls dropped sharply. However, the political landscape in the eurozone’s largest economy remains cloudy. President Angela Merkel is now looking at the Social Democrats to help her make a new government, and preliminary talks are scheduled to begin on Sunday. The negotiations are likely to be lengthy, and the current caretaker government could remain in office for several more months.

The euro lost ground on Friday, after mixed US employment numbers. Nonfarm Payrolls dropped to 148 thousand, down from 228 thousand in the previous release. This was well below the estimate of 190 thousand. There was better news from wage growth, which edged up to 0.3%, matching the forecast. This marked a 3-month high. The unemployment rate remained unchanged, at a sizzling 4.1%.

EUR/USD Fundamentals

Monday (January 8)

  • 2:00 German Factory Orders. Estimate +0.1%. Actual -0.4%
  • 4:30 Eurozone Sentix Investor Confidence. Estimate 31.5. Actual 32.9
  • 5:00 Eurozone Retail Sales. Estimate 1.4%. Actual 1.5%
  • 12:40 US FOMC Member Raphael Bostic Speaks
  • 13:35  US FOMC Member John Williams Speaks
  • 15:00 US Consumer Credit. Estimate 17.8

Tuesday (January 9)

  • 2:00 German Industrial Production. Estimate 1.9%
  • 2:00 German Trade Balance. Estimate 20.7B
  • 2:45 French Trade Balance. Estimate -4.8B
  • 5:00 Eurozone Unemployment Rate. Estimate 8.7%
  • 10:00 US JOLTS Job Openings. Estimate 6.05M

*All release times are GMT

*Key events are in bold

EUR/USD for Monday, January 8, 2018

EUR/USD for January 8 at 6:00 EDT

Open: 1.2030 High: 1.2052 Low: 1.1983 Close: 1.1999

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1777 1.1876 1.1961 1.2092 1.2221 1.2357

EUR/USD was flat in the Asian and European

  • 1.1961 is a weak support line
  • 1.2092 is the next resistance line

Further levels in both directions:

  • Below: 1.1961, 1.1876, 1.1777 and 1.1657
  • Above: 1.2092, 1.2221 and 1.2357
  • Current range: 1.1961 to 1.2092

OANDA’s Open Positions Ratio

EUR/USD ratio is showing little movement in the Monday session. Currently, short positions have a majority (67%), indicative of EUR/USD continuing to move 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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.