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EUR/USD – Euro steady, markets await US nonfarm payrolls

EUR/USD has posted gains in the Friday session. Currently, the pair is trading at 1.1711, up 0.18% on the day. On the release front, German Industrial Production jumped 2.6%, crushing the estimate of 0.3%. In the U.S, the focus will be on employment data. Nonfarm Payrolls are expected to drop to 195 thousand and wage growth is forecast to remain pegged at 0.3%. The unemployment rate is also expected to stay unchanged at a sizzling 3.8%.

All eyes were on the FOMC minutes on Thursday, but EUR/USD yawned, showing little reaction to the release. The minutes were somewhat dovish in tone, as policymakers gave a thumbs-up to the strong U.S economy, but expressed concern about developments abroad. These include growing trade tensions with U.S trading partners, as well as political and economic developments in Europe. The minutes also reiterated the Fed’s support for a “gradual” raise in interest rates. The markets are circling the September policy meeting for the next rate hike, with the CME Group setting the odds of a quarter-point hike at 79%.

The worsening tariff battle will be in focus on Friday, as U.S tariffs on $34 billion in Chinese products took effect earlier on Friday. This move on its own will have a marginal effect on trade, but investors are nervous that the Chinese will retaliate, and President Trump could fire back. Both the U.S and China have shown no signs of backing down, and Trump recently threatened to slap tariffs on some $500 billion in Chinese imports, underscoring that this tariff battle could easily deteriorate into an all-out trade war and trigger a global recession. European officials will be anxiously watching these developments, as Trump has threatened to impose tariffs of 20 percent on European auto imports if the EU does not remove their tariffs on U.S automobiles. The EU would clearly prefer not to engage in a full-blown tariff war with the United States and European officials are examining the possibility of a tariff-cutting agreement between the world’s largest car exporters. In essence, this would allow the EU and the U.S to quickly reach a deal on automobile tariffs without having to go through the World Trade Organization.

  The trade war is finally upon us [1]

  Wait-and-see as tariffs and payrolls loom [2]

EUR/USD Fundamentals

Friday (July 6)

*All release times are DST

*Key events are in bold

EUR/USD for Friday, July 6, 2018

EUR/USD for July 6 at 3:55 DST

Open: 1.1690 High: 1.1715 Low: 1.1680 Close: 1.1706

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1434 1.1553 1.1637 1.1728 1.1829 1.1910

EUR/USD was flat for most of the Asian session and has posted slight gains in European trade

Further levels in both directions:

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 [6]

Currency Analyst at Market Pulse [7]
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.
Kenny Fisher

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