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EUR/USD – Euro rally stalls on soft manufacturing PMIs

EUR/USD has recorded losses in the Thursday session. Currently, the pair is trading at 1.1564, down 0.27% on the day. In economic news, manufacturing PMIs in Germany and the eurozone softened in July and missed their estimates. In the U.S, unemployment claims are expected to rise to 215 thousand. It’s Day 1 of the Jackson Hole Symposium, a gathering of the heads of major central banks. On Friday, the U.S releases durable goods orders.

Manufacturing PMIs were a sore spot on Thursday, as German and eurozone releases were unexpectedly soft, pulling the euro lower. German Manufacturing PMI dropped from 57.3 to 56.1, while Eurozone Manufacturing PMI fell from 55.1 to 54.6 points. Global trade war tensions, as well as political worries in Italy have dampened the economic outlook in the eurozone, and manufacturing is perhaps the most vulnerable sector to the escalating trade war, notably between the U.S and China. Trade tensions continue to persist between the U.S and the EU as well, despite recent talks between senior officials. On Wednesday, President Trump threatened to slap a 25% tariff on all EU imports.

The Federal Reserve released the minutes of its August meeting, at which policymakers maintained the benchmark rate. The minutes noted that the U.S economy remains strong and hinted that the Fed would raise rates in September. However, policymakers added that there plan to continue with gradual rate increases could have to be halted if the global trade war worsened, as the trade war represented a major downside risk to the U.S economy. Fed Chair Jerome Powell will address the Jackson Hole Symposium on Friday, and investors will be listening carefully. Powell is expected to refer to trade tensions, as well as the fact that inflation and wage growth have lagged, despite a booming U.S economy. The minutes have cemented a rate hike in September, with market odds currently at 96%. The likelihood of a December rate hike stands at 57%.

Aussie drops on Turnbull turbulence [1]

Tariffs support U.S dollar [2]

Thursday (August 23)

Friday (August 24)

*All release times are DST

*Key events are in bold

EUR/USD for Thursday, August 23, 2018

EUR/USD for August 23 at 6:40 DST

Open: 1.1596 High: 1.1600 Low: 1.1542 Close: 1.1564

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1312 1.1434 1.1553 1.1637 1.1718 1.1840

EUR/USD edged lower in the Asian session. The pair has been mostly flat in European trade

Further levels in both directions:

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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.