EUR/USD – Euro shrugs off weak German industrial data

EUR/USD has recorded small losses in the Thursday session. Currently, the pair is trading at 1.1624, down 0.07% on the day. On the release front, German Factory Orders declined 0.9%, missing the estimate of +1.8%. In the U.S, the focus will be on key employment indicators. ADP nonfarm payrolls is expected to slide to 195 thousand and unemployment claims are forecast to tick higher to 214 thousand. As well, ISM Non-Manufacturing PMI is expected to improve to 56.8 points. Friday will be busy, so traders should be prepared for some movement from EUR/USD. Germany releases industrial production and trade balance, while the eurozone will release GDP. In the U.S, there are three key employment indicators – nonfarm payrolls, wage growth and the unemployment rate.

This week’s German manufacturing indicators have been soft. This has weighed on the euro and also raised concern about the strength of the German economy, the largest in the eurozone. Factory orders dropped 0.9% in July, its fourth decline in five months. New orders were down in the eurozone as well as in other countries, as weaker growth in the eurozone and elsewhere has taken a bite out of the manufacturing sector. Earlier in the week, 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. We’ll get another look at German industrial data on Friday, with the release of Industrial Production. The markets are expecting a small gain of 0.2%.

The U.S dollar remains strong, as trade tensions boosted the U.S dollar against its major rivals. Nervous investors are keeping an eye on the White House, as President Trump could announce further trade sanctions against China as early as today. Trade tensions have been on the rise since April, when the U.S started imposed tariffs to protest its claim of unfair trade practices by its trading partners, in particular, China. The dollar has benefited from the global trade war, and further tariffs against China could boost the greenback and send gold prices lower.

Lather Rinse Repeat

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EUR/USD Fundamentals

Thursday (September 6)

• 2:00 German Factory Orders. Estimate +1.8%. Actual -0.9%
• Tentative – Spanish 10-year Bond Auction
• Tentative – French 10-year Bond Auction
• 7:30 US Challenger Job Cuts
• 8:15 US ADP Nonfarm Employment Change. Estimate 195K
• 8:30 US Unemployment Claims. Estimate 214K
• 8:30 US Revised Nonfarm Productivity. Estimate 2.9%
• 8:30 US Revised Unit Labor Costs. Estimate -0.9%
• 9:45 US Final Services PMI. Estimate 55.2
• 10:00 US ISM Non-Manufacturing PMI. Estimate 56.8
• 10:00 US FOMC Member John Williams Speaks
• 10:00 US Factory Orders. Estimate -0.5%
• 10:30 US Natural Gas Storage. Estimate 60B
• 11:00 US Crude Oil Inventories. Estimate -2.2M

Friday (September 7)

• 2:00 German Industrial Production. Estimate 0.2%
• 2:00 German Trade Balance. Estimate 19.1B
• 5:00 Eurozone Revised GDP. Estimate 0.4%
• All Day – Eurogroup Meetings
• 8:30 US Average Hourly Earnings. Estimate 0.2%
• 8:30 US Nonfarm Employment Change. Estimate 193K
• 8:30 US Unemployment Rate. Estimate 3.8%

*All release times are DST

*Key events are in bold

EUR/USD for Thursday, September 6, 2018

EUR/USD for September 6 at 6:10 DST

Open: 1.1630 High: 1.1659 Low: 1.1614 Close: 1.1624

EUR/USD Technical

EUR/USD was flat for most of the Asian session. The pair has ticked lower in European trade

• 1.1553 is providing support
• 1.1637 was tested earlier in resistance. It is a weak line

Further levels in both directions:

• Below: 1.1553, 1.1434 and 1.1312
• Above: 1.1637, 1.1718, 1.1840 and 1.1961
• Current range: 1.1553 to 1.1637

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