EUR/USD – Euro dips in light holiday trade

EUR/USD has edged lower in the Monday session. Currently, the pair is trading at 1.1306, down 0.24% on the day. German banks are closed for Whit Day. On the release front, there are no German or eurozone events. In the U.S., the sole event is JOLTS Job Openings, which is expected to tick up to 7.50 million. On Tuesday, the U.S. releases Producer Price Index reports.

The euro enjoyed an outstanding week, with gains of 1.5%. This marked the strongest weekly gain since August. The currency posted considerable gains on Friday, after a dismal nonfarm payrolls report for May. The economy created only 75 thousand jobs, down from 263 thousand a month earlier. Wage growth was unchanged at 0.2%, shy of the estimate of 0.3%. Despite these soft job numbers, the U.S. economy remains in far better shape than the eurozone, so last week’s spike could be short-lived.

The message from last week’s ECB policy meeting was dovish, yet the euro still managed to post gains. The ECB surprised the markets by revising its forward guidance, saying that it would not raise interest rates before the middle of 2020. Previously, the bank had said that it would not hike rates prior to the spring of 2020. The delay is a response to weak economic conditions in the eurozone, as the global trade war has taken a toll on manufacturing and exports in Germany and the rest of the bloc.

As expected, ECB President Draghi said that ECB will pay banks to borrow funds from the central bank, if the funds are passed on to consumers and small businesses. This is a stimulus measure with the aim of boosting spending in the private sector. The bank upwardly revised its 2019 outlooks for growth and inflation. In March, the ECB forecast GDP at 1.1% and inflation at 1.2% – these were revised to 1.2% and 1.3%, respectively.

Aussie dips as China imports contract

EUR/USD Fundamentals

Monday (June 10)

  • 4:00 Italian Industrial Production. Estimate 0.2%. Actual -0.7%
  • 10:00 US JOLTS Openings. Estimate 7.50M

Tuesday (June 11)

  • 4:30 Eurozone Sentix Investor Confidence. Estimate 2.3
  • 6:00 US NFIB Small Business Index. Estimate 102.3
  • 8:30 US Core PPI. Estimate 0.2%
  • 8:30 US PPI. Estimate 0.1%

*All release times are DST

*Key events are in bold

EUR/USD for Monday, June 10, 2019

EUR/USD for June 10 at 5:50 DST

Open: 1.1334 High: 1.1334 Low: 1.1290 Close: 1.1306

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1120 1.1212 1.1300 1.1434 1.1553 1.1621

EUR/USD edged lower in the Asian session and is steady in European trade

  • 1.1300 is a weak support line
  • 1.1434 is the next resistance line
  • Current range: 1.300 to 1.1434

Further levels in both directions:

  • Below: 1.1300, 1.1212, 1.1120 and 1.1046
  • Above: 1.1434 and 1.1553 and 1.1621

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.