Euro Starts off Week Quietly at 1.06, Eurozone Investor Confidence Jumps

EUR/USD has started off the week quietly, after posting losses in the Friday session. Currently, the pair is trading just below the 1.06 level. On the release front, Eurozone Sentix Investor Confidence jumped to 23.9, beating the estimate of 20.1 points. In the US, Federal Reserve Chair Janet Yellen will speak at an event at the University of Michigan. On Tuesday, Germany releases ZEW Economic Sentiment.

The eurozone economy has shown improvement in recent months, led by Germany, the largest economy in the eurozone. With economic conditions improving, investor confidence levels have followed suit and moved upwards. Sentix Investor Confidence climbed to 23.9 points in April, pointing to strong optimism among investors and analysts. Investor confidence numbers have been strong in the first quarter, and are much higher than they were a year ago. The German ZEW Economic Sentiment surveys the mood of German investors, and the markets are expecting a strong reading for April, with the indicator expected to climb to 13.2 points.

US Nonfarm Payrolls was unexpectedly soft in March, as the economy produced just 98 thousand jobs, compared to an estimate of 174 thousand. However, the good news is that the weak reading was not accompanied by higher unemployment numbers. The unemployment rate dropped to 4.5% and jobless claims fell sharply to 234 thousand. This means that the Fed is unlikely to lose any sleep over the weak payrolls report, and will remain on course to raise rates twice more in 2017 (a majority of FOMC voting members favor two more hikes, while some members have called for three more hikes this year). According to the CME Group, the markets have circled June as the next likely date for a hike, which is priced in at 67 percent. The Fed would like to see inflation move closer to its target of two percent, and we’ll get a look at US consumer inflation reports on Friday.

EUR/USD Fundamentals

Monday (April 10)

  • 8:00 Italian Industrial Production. Estimate 0.4%. Actual 1.0%
  • 8:30 Euroozone Sentix Investor Confidence. Estimate 20.1. Actual 23.9
  • 14:00 US Labor Market Conditions Index
  • 20:10 US Fed Chair Janet Yellen Speech

Tuesday (April 11)

  • 9:00 German ZEW Economic Sentiment. Estimate 13.2

*All release times are EST

*Key events are in bold

EUR/USD for Monday, April 10, 2017

EUR/USD April 10 at 6:00 EST

Open: 1.0581 High: 1.0594 Low: 1.0570 Close: 1.0579

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0214 1.0340 1.0506 1.0616 1.0708 1.0873

EUR/USD was flat in the Asian session. In European trade, the pair edged higher but has retracted

  • 1.0506 is providing support
  • 1.0616 is a weak resistance line

Further levels in both directions:

  • Below: 1.0506, 1.0340 and 1.0214
  • Above: 1.0616, 1.0708, 1.0873 and 1.0985
  • Current range: 1.0506 to 1.0616

OANDA’s Open Positions Ratio

In the Monday session, EUR/USD ratio is showing long positions with a majority (59%). This is indicative of trader bias towards EUR/USD breaking out and moving upwards.

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.