EUR/USD – Euro under pressure, German unemployment rolls swell

EUR/USD has ticked lower in the Wednesday session. Currently, the pair is trading at 1.1151, down 0.08% on the day. In economic news, French GDP and consumer inflation were within expectations. German unemployment rolls swelled by 60 thousand, much higher than the estimate of -8 thousand. The ECB released its financial stability report, which is published twice a year. In the U.S., the sole event is the Richmond Manufacturing Index, which is projected to climb to 6 points. On Thursday, the U.S. releases GDP and unemployment claims.

The German economy has been showing signs of weakness, but the labor market has remained a bright spot. However, unemployment rolls ballooned by 60 thousand in April, surprising the markets. The indicator has recorded consecutive declines for almost two years, and investors are hoping that the April spike was a one-time blip. If upcoming German employment numbers follow suit and miss expectations, the euro could lose ground.

As the locomotive of the eurozone economy, German indicators are a bellwether for the rest of the eurozone. Consumer confidence took a hit in May, as GfK Consumer Climate slipped to 10.1 points, down from 10.4 in April. This was the lowest score since April 2017. With the escalation in U.S-China trade tensions, there is no end in sight to the tariffs which have been imposed on European goods, which has dampened consumer confidence. We’ll get a look at the health of consumer spending on Thursday, when Germany releases retail sales. After a decline of 0.2% in April, the markets are expecting a rebound in May, with a forecast of 0.4%.

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EUR/USD Fundamentals

Wednesday (May 29)

  • 2:45 French Consumer Spending. Estimate 0.5%. Actual 0.8%
  • 2:45 French Preliminary CPI. Estimate 0.3%. Actual 0.2%
  • 2:45 French Preliminary GDP. Estimate 0.3%. Actual 0.3%
  • 3:00 German Buba President Weidmann Speaks
  • 3:55 German Unemployment Change. Estimate -8K. Actual 60K
  • 4:00 ECB Financial Stability Review
  • 10:00 US Richmond Manufacturing Index. Estimate 6

Thursday (May 30)

  • 8:30 US Preliminary GDP. Estimate 3.1%
  • 8:30 US Unemployment Claims. Estimate 216K

*All release times are DST

*Key events are in bold

EUR/USD for Wednesday, May 29, 2019

EUR/USD for May 29 at 6:40 DST

Open: 1.1160 High: 1.1173 Low: 1.1150 Close: 1.1151

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0950 1.1046 1.1120 1.1212 1.1300 1.1434

EUR/USD was flat for most of the Asian session and has posted small losses in European trade

  • 1.1120 is providing support
  • 1.1212 is the next resistance line
  • Current range: 1.1120 to 1.1212

Further levels in both directions:

  • Below: 1.1120, 1.1046 and 1.0950
  • Above: 1.1212, 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.