EUR/USD – Euro rallies to 1-week high on May Day

EUR/USD continues to climb this week, as the pair has gained close to 1.0 percent. Currently, the pair is trading at 1.1236, up 0.18%. The pair is currently at its highest level since April 23. German banks are closed for the May Day holiday, so the pair is unlikely to show much movement on Wednesday. In economic news, there are no German or eurozone events. In the U.S., all eyes are on the Federal Reserve, which releases its rate statement. The U.S. will release ADP nonfarm payrolls, which is expected to jump to 181 thousand, after a weak reading of 129 thousand in the previous release. As well, the ISM Manufacturing PMI is expected to drop to 55.0 points. On Thursday, Germany releases manufacturing PMI and retail sales, while the U.S. posts unemployment claims.

Will the Federal Reserve rain on the euro party? Rate-makers are expected to sit on the sidelines and keep rates at a range between 2.25-2.50 percent. Investors will be focused on the rate statement, looking for clues regarding the next rate move. The Federal Reserve has said it expects to hold interest rate levels for the rest of the year, and the most recent inflation numbers will reinforce that stance, as the Fed target of 2.0% remains elusive. The Core PCE Price Index, which is the Federal Reserve’s preferred gauge for inflation, came in at 0.0% in March and 0.1% in February (the two events were released on Tuesday due to the government shutdown earlier this year). On an annualized basis, the indicator gained 1.6%, just shy of the estimate of 1.7%. GDP and consumer spending are looking bright, but nonetheless there is no danger of the economy overheating, so the Fed can afford to leave rates at the current level for the near future.

fomc-guide-low-inflation-may-allow-fed-tee-rate-cut

Will the U.S dollar get the Fed’s help?

EUR/USD Fundamentals

Wednesday (May 1)

  • 8:15 US ADP Nonfarm Employment Change. Estimate 181K
  • 9:45 US Final Manufacturing PMI. Estimate 52.4
  • 10:00 US ISM Manufacturing PMI. Estimate 55.0
  • 10:00 US Construction Spending. Estimate 0.3%
  • 10:00 US ISM Manufacturing Prices. Estimate 54.5
  • 10:30 US Crude Oil Inventories. Estimate 1.3M
  • All Day – US Total Vehicle Sales. Estimate 17.1M
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate <2.50%
  • 14:00 FOMC Press Conference

Thursday (May 2)

  • 2:00 German Retail Sales. Estimate -0.5%
  • 3:15 Spanish Manufacturing PMI. Estimate 51.2
  • 3:45 Italian Manufacturing PMI. Estimate 47.8
  • 3:50 French Final Manufacturing PMI. Estimate 49.6
  • 3:55 German Final Manufacturing PMI. Estimate 44.5
  • 4:00 Eurozone Final Manufacturing PMI. Estimate 47.8
  • Tentative – French 10-year Bond Auction
  • 7:30 US Challenger Job Cuts
  • 8:30 US Preliminary Nonfarm Productivity. Estimate 0.9%
  • 8:30 US Preliminary Unit Labor Costs. Estimate 2.4%
  • 8:30 US Unemployment Claims. Estimate 220K
  • 10:00 US Factory Orders. Estimate 1.0%
  • 10:30 US Natural Gas Storage. Estimate 107B
  • Tentative – Treasury Currency Report

*All release times are DST

*Key events are in bold

EUR/USD for Wednesday, May 1, 2019

EUR/USD for May 1 at 7:00 DST

Open: 1.1215 High: 1.1240 Low: 1.1211 Close: 1.1238

EUR/USD Technical

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

EUR/USD was flat in the Asian session and has edged higher in European trade

  • 1.1212 was tested in support earlier in the session. It is a weak line
  • 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 1.0950
  • 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.