EUR/USD – Euro gains ground as German trade surplus beats estimate

EUR/USD has started the week with gains. In the Monday session, the pair is trading at 1.1418, up 0.34% on the day. There are no major releases out of the eurozone or the United States. Germany’s trade surplus fell to EUR 17.3 billion, edging above the estimate of EUR 17.2 billion. The Eurozone Sentix Investor Confidence posted a decline of 0.3, well short of the estimate of 8.4 points. The sole event in the U.S. is JOLTS Job Openings. The indicator is expected to improve to 7.22 million, after the previous release of 7.01 million. On Tuesday, German ZEW Economic Sentiment is expected to weaken to 25.0 points. In the U.S, the Producer Prices Index is forecast to drop to 0.0%.

The U.S. ended the week with dismal employment numbers, although the euro couldn’t take advantage and was unchanged on Friday. Nonfarm employment change was weaker than expected, plunging from 250 thousand to 155 thousand. This was well off the forecast of 198 thousand. Wage growth remained stuck at 0.2%, missing the estimate of 0.3%. There was better news from the unemployment rate, which remained at a sizzling 3.7%. The data points to slowing growth in the U.S, which could lead to a change in monetary policy. The Federal Reserve minutes from the November meeting indicated that policymakers discussed changing their stance of gradual increases rate increases. The markets are currently looking at one rate hike next year – just a few months ago, there was talk of a rate hike in each quarter of 2019.

Global stock markets had a dismal week, as nervous investors continue to fret over the U.S-China trade war. Although President Trump agreed to suspend further tariffs against China for 90 days. However, there are concerns that the two sides will not be able to close the gaps in their positions in just a few weeks. The markets soured on Thursday, after a senior Chinese executive, Meng Wanzhou, was arrested in Vancouver for allegedly violating trade sanctions against Iran. Wanzhou faces extradition to the U.S., and China’s indignant response to the arrest could torpedo upcoming trade talks between the two countries.

Aussie dips as China trade slows

European open – Tough week for UK and markets

EUR/USD Fundamentals

Monday (December 10)

• 2:00 German Trade Balance. Estimate 17.2B. Actual 17.3B
  
• 4:00 Italian Industrial Production. Estimate -0.4%. Actual 0.1%
• 4:30 Eurozone Sentix Investor Confidence. Estimate 8.4. Actual -0.3
• 10:00 US JOLTS Openings. Estimate 7.22M

Tuesday (December 11)

• 5:00 German ZEW Economic Sentiment. Estimate -25.0
• 5:00 Eurozone ZEW Economic Sentiment. Estimate -23.2
• 8:30 US PPI. Estimate 0.0%
• 8:30 US Core PPI. Estimate 0.1%

*All release times are EST

*Key events are in bold

EUR/USD for Monday, December 10, 2018

EUR/USD for December 10 at 6:50 EST

Open: 1.1379 High: 1.1443 Low: 1.1379 Close: 1.1418

EUR/USD Technical

EUR/USD ticked lower in the Asian session and has recovered in European trade

• 1.1300 is providing support
• 1.1434 is the next resistance line
• Current range: 1.1300 to 1.1434

Further levels in both directions:

• Below: 1.1300, 1.1212, 1.1120 and 1.0992
• Above: 1.1434, 1.1553 and 1.1685

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