EUR/USD has posted gains in the Friday session, continuing the upward trend we saw on Thursday. Currently, the pair is trading at 1.1639, up 0.32% on the day. On the release front, the focus is on manufacturing and services PMIs. Germany and the eurozone posted Services PMIs of 53.9 and 55.0, respectively, both of which beat the estimates. On the manufacturing front, German Manufacturing PMI dropped to 55.9, missing the estimate of 56.3 points. Eurozone Manufacturing PMI softened to 55.0, matching the estimate. Later in the day, OPEC members meet in Vienna to discuss a proposal to raise oil production.
Led by the German locomotive, the eurozone economy continues to grow, although there was a hiccup in the first quarter. The ECB has given the economy a vote of confidence, with a decision to finally wind up its asset-purchase program at the end of 2018. The June PMI reports pointed to continued expansion in the manufacturing and services sectors, but all may not be well. The eurozone and German Manufacturing PMIs both slowed for a sixth straight month, and the German release was the weakest since December 2016. With global protectionism on the rise as the trade war worsens, German and eurozone exports could suffer, which in turn would have a negative impact on manufacturers. If upcoming PMIs continue to weaken, investor confidence in the eurozone could wane and weigh on the euro.
Central bankers converged in Sintra, Portugal this week, and the trade war between the U.S and its trading partners was high on the agenda. The United States and the EU have slapped tariffs on each other, and President Trump shook up global equity markets when he threatened to impose a 10 percent tariff on some $200 billion worth of Chinese goods. The heads of the central banks from the U.S and the European Union were united in the gloomy view of the trade conflict, with Federal Reserve Chair Jerome Powell saying that the changes in trade policy could force the Fed to “question its outlook”. ECB President Mario Draghi said that the trade spat could have negative consequences on monetary policy. If these protectionist measures force central banks to alter their monetary policy, this could have a significant impact on exchange rates.
All eyes on OPEC 
Friday (June 22)
- 3:00 French Flash Manufacturing PMI. Estimate 54.0. Actual 53.1
- 3:00 French Flash Services PMI. Estimate 54.3. Actual 56.4
- 3:30 German Flash Manufacturing PMI. Estimate 56.3. Actual 55.9
- 3:30 German Flash Services PMI. Estimate 52.2. Actual 53.9
- 4:00 Eurozone Flash Manufacturing PMI. Estimate 55.0. Actual 55.0
- 4:00 Eurozone Flash Services PMI. Estimate 53.7. Actual 55.0
- 9:00 Belgian NBB Business Climate. Estimate 0.0
- 9:45 US Flash Manufacturing PMI. Estimate 56.3
- 9:45 US Flash Services PMI. Estimate 56.4
- All Day – OPEC Meetings
- All Day – ECOFIN Meetings
*All release times are DST
*Key events are in bold
EUR/USD for Friday, June 22, 2018
EUR/USD for June 22 at 5:45 DST
Open: 1.1603 High: 1.1675 Low: 1.1600 Close: 1.1639
EUR/USD has been breaking through resistance levels as it gains ground. The pair was flat in the Asian session and has posted gains in European trade
- 1.1637 is fluid. Currently, it is a weak support level
- 1.1728 is the next resistance line
Further levels in both directions:
- Below: 1.1637, 1.1553, 1.1434 and 1.1312
- Above: 1.1728, 1.1829 and 1.1910
- Current range: 1.1637 to 1.1728
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.