EUR/USD starts week with a whimper

EUR/USD is showing little movement in the Monday session. Currently, the pair is trading at 1.1450, up 0.05% on the day. There are no major events on the schedule. Eurozone Sentix Investor Confidence posted a third successive decline, with a score of -3.7 points. On the inflation front, PPI disappointed with a decline of 0.8%, its weakest reading since January 2016. On Tuesday, Germany and the eurozone release services PMIs. The eurozone will also publish retail sales. In the U.S, the key event is ISM Non-manufacturing PMI.

German numbers continue to sag, raising concerns about the health of the eurozone economy. On Friday, German manufacturing PMI for January dipped to 49.7, below the 50-point level which separates contraction and expansion. This was the weakest score since October 2014. Trade tensions and weakness in the German auto sector continue to weigh on the manufacturing sector. This reading followed a very soft reading from German retail sales, which plunged 4.3% in December. This marked its sharpest decline in more than 12 years.

In the U.S., the week ended with mixed employment numbers. The economy created 304 thousand jobs, crushing the estimate of 165 thousand. This was the second score above the 300-thousand mark for a second successive month. However, wage growth was a disappointment, dropping from 0.4% to 0.1%. This fell shy of the estimate of 0.3% and marked the weakest reading since April 2018. Despite the sparkling non-farm payrolls, the dollar was unable to make any gains against the euro, as dollar bulls focused on the weak wage growth numbers. As well, enthusiasm for the greenback was dampened by the dovish message from the Fed in its first monetary policy update of 2019. Fed chair Powell reinforced the sentiment that the Fed will ease up on rate policy, saying the central bank would be “patient” regarding future rate hikes.

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EUR/USD Fundamentals

Monday (February 4)

  • 3:00 Spanish Unemployment Change. Estimate 60.3K. Actual 83.5K
  • 4:30 Eurozone Sentix Investor Confidence. Estimate -1.1. Actual -3.7
  • 5:00 Eurozone PPI. Estimate -0.7%. Actual -0.8%
  • 5:00 Italian Preliminary CPI. Estimate 0.1%. Actual 0.1%
  • 10:00 US Factory Orders. Estimate 0.3%
  • Tentative – US Loan Officer Survey

Tuesday (February 5)

  • 3:55 German Final Services PMI. Estimate 53.1
  • 4:00 Eurozone Final Services PMI. Estimate 50.8
  • 5:00 Euruzone Retail Sales. Estimate -1.5%
  • 10:00 US ISM Non-Manufacturing PMI. Estimate 57.0

*All release times are EST

*Key events are in bold

EUR/USD for Monday, February 4, 2019

EUR/USD for February 4 at 7:25 EST

Open: 1.1456 High: 1.1461 Low: 1.1438 Close: 1.1450

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1212 1.1300 1.1434 1.1553 1.1685 1.1803

EUR/USD posted small losses in the Asian session and is showing little movement in European trade

  • 1.1434 is a weak support level. It could be tested in the Monday session
  • 1.1553 is the next resistance line
  • Current range: 1.1434 to 1.1553

Further levels in both directions:

  • Below: 1.1434, 1.1300, 1.1212 and 1.1120
  • Above: 1.1553, 1.1685 and 1.1803

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

Currency Analyst at Market Pulse
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.