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EUR/USD – Euro dips against greenback, US Manufacturing PMI next

EUR/USD has posted considerable losses on Tuesday, after showing little movement in thin trade on the Labor Day holiday. Currently, the pair is trading at 1.1563, down 0.49% on the day. In the eurozone, industrial producer prices rose 0.4% in July. In the U.S, today’s key indicator is ISM Manufacturing PMI, which is expected to dip to 57.6 points. On Wednesday, Germany and the eurozone release Services PMI and we’ll also get a look at eurozone retail sales.

Eurozone and German manufacturing PMIs are still pointing to expansion, but there is concern in the markets as the downward trend continued in August. This was particularly evident in Eurozone Final Manufacturing PMI, which lost ground for an eighth straight month. The reading of 54.6, which matched the estimate, marked the lowest level since November 2016. In Germany, Final Manufacturing PMI fell from 56.9 to 55.9. Although this is a respectable reading, it is significantly lower than the readings we saw early in 2018, when the indicator was above the 60-level. German manufacturers remain generally optimistic, but have growing concerns over tariffs which the U.S has slapped on China and the EU.

In December, the ECB plans to wind up its asset-purchase program, which has been in play since March 2015. ECB policymakers have taken pains to provide themselves some wiggle room, saying that the program could be extended if inflation suddenly weakens. Still, the markets expect this stimulus plan to be terminated on schedule. In August, the Bank purchased EUR $29 billion, the lowest level since this stimulus program started. Traditionally, August is a quiet month, with many sellers on holiday.

Emerging market losses continue on Tuesday [1]

25% chance of hard Brexit according to economists [2]

EM rout not yet complete [3]

EUR/USD Fundamentals

Tuesday (September 4)

Wednesday (September 5)

*All release times are DST

*Key events are in bold

EUR/USD for Tuesday, September 4, 2018

EUR/USD for September 4 at 5:40 DST

Open: 1.1619 High: 1.1621 Low: 1.1563 Close: 1.1563

EUR/USD Technical

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

EUR/USD ticked lower in the Asian session and has recorded stronger losses 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 [7]

Market Analyst at OANDA [8]
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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