EUR/USD – Euro improves on German services PMI, eurozone retail sales

After a luckluster start to the week, EUR/USD has posted gains on Wednesday. Currently, the pair is trading at 1.1246, up 0.37% on the day. On the release front, the focus is on the service sector. German and eurozone services PMIs indicated expansion and beat their estimates. Eurozone retail sales slowed to 0.4%, but managed to beat the forecast of 0.2%. In the U.S., this week’s employment data kicks off with ADP nonfarm payrolls, which is projected to tick up to 184 thousand. As well, the ISM Non-Manufacturing PMI is expected to drop to 58.1 points. On Thursday, the ECB posts the minutes of its March meeting and the U.S. releases unemployment claims.

After disappointing manufacturing PMIs in March, there was better news from services PMI reports. German and eurozone indicators came in at 55.4, and 53.3, respectively. This points to expansion, in contrast to the manufacturing PMIs, which are showing contraction. Investors are also concerned that the manufacturing PMIs have been falling for months. This is largely due to the global trade war, which continues to dampen manufacturing activity in Germany and the rest of the eurozone.

The U.S. economy remains strong, but this week’s key numbers have been anything but impressive. The weak durable goods orders data comes on the heels of soft retail sales numbers for March. Retail sales declined by 0.2%, shy of the estimate of +0.3%. Core retail sales declined by 0.4%, a sharp drop from the 0.9% gain a month earlier. Both indicators posted a second decline in three months, which is bound to raise concerns about the strength of the economy. There are concerns that the economy could be slowing down – growth for the first quarter could be as low as 0.8% annualized, compared to 2.2% in the fourth quarter.

European open – Markets off to a bright start

Pound sterling in the shop window

EUR/USD Fundamentals

Wednesday (April 3)

  • 3:15 Spanish Services PMI. Estimate 55.0. Actual 56.8
  • 3:45 Italian Services PMI. Estimate 50.9. Actual 53.1
  • 3:50 French Final Services PMI. Estimate 48.7. Actual 49.1
  • 3:55 German Final Services PMI. Estimate 54.9. Actual 55.4
  • 4:00 Eurozone Final Services PMI. Estimate 52.7. Actual 53.3
  • 5:00 Eurozone Retail Sales. Estimate 0.2%. Actual 0.4%
  • 8:15 US ADP Nonfarm Employment Change. Estimate 184K
  • 9:45 US Final Services PMI. Estimate 54.8
  • 10:00 US ISM Non-Manufacturing PMI. Estimate 58.1
  • 10:30 US Crude Oil Inventories. Estimate -0.7M

Thursday (April 4)

  • 2:00 German Factory Orders. Estimate 0.3%
  • 7:30 ECB Monetary Policy Meeting Accounts
  • 8:30 US Unemployment Claims. Estimate 215K

*All release times are DST

*Key events are in bold

EUR/USD for Wednesday, April 3, 2019

EUR/USD for April 3 at 7:00 DST

Open: 1.1204 High: 1.1255 Low: 1.1201 Close: 1.1246

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1046 1.1120 1.1212 1.1300 1.1434 1.1553

EUR/USD has posted slight gains in the Asian session and the trend continues in European trade

  • 1.1212 is providing support
  • 1.1300 is the next resistance line
  • Current range: 1.1212 to 1.1300

Further levels in both directions:

  • Below: 1.1212, 1.1120, 1.1046 and 1.0951
  • Above: 1.1300, 1.1434 and 1.1553

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.