EUR/USD – Euro posts gains as Trump holds off on new Chinese tariffs

EUR/USD has posted gains in the Monday session. Currently, the pair is trading at 1.1347, up 0.25% on the day. On the release front, German and eurozone manufacturing PMIs both missed their estimates, with both indicators posting readings of 51.8 points. In the U.S, today’s key event is ISM Manufacturing PMI, which is expected to tick lower to 57.7 points. On Tuesday, the eurozone releases PPI, which is expected to remain pegged at 0.5%.

German indicators have been pointing lower, and this worrying trend continued on Monday. Manufacturing PMI dropped to 51.8 in November, down from 52.2 points in October. This marked a fourth straight downturn and was the lowest reading since April 2016. The global trade war has taken a bite out of German exports and a slowdown in the eurozone economy has dampened manufacturing growth in Germany. On Friday, German retail sales fell by 0.3%, its first decline since July. Consumers are holding tighter to the purse strings, which is hurting economic growth. Unsurprisingly, consumer confidence softened in November – the reading of 10.4 points was its lowest level since May 2017.

The G-20 summit ended on the weekend, and there was an audible sigh of relief from the markets after a meeting between President Trump and Chinese President Xi Jinping. Trump suspended his threat to raise tariffs on Chinese products on January 1 from 10 percent to 25 percent. The sides agreed to continues talks for another 90 days, and the U.S. tariffs will take effect if no agreement is reached. The ‘cease fire’ was welcome news for investors, and the increase in risk appetite on Monday has led to broad losses for the U.S. dollar. Still, the U.S. and China remain far apart on a deal, and the greenback will likely reverse directions unless the parties make substantial progress in the trade dispute, which has shaken the markets and threatens to derail global growth.

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EUR/USD Fundamentals

Monday (December 3)

  • 3:15 Spanish Manufacturing PMI. Estimate 51.5. Actual 52.6
  • 3:45 Italian Manufacturing PMI. Estimate 48.9. Actual 48.6
  • 3:50 French Final Manufacturing PMI. Estimate 50.7 Actual 50.8
  • 3:55 German Final Manufacturing PMI. Estimate 51.6. Actual 51.8
  • 4:00 Eurozone Final Manufacturing PMI. Estimate 51.5. Actual 51.8
  • 6:30 US FOMC Member Clarida Speaks
  • 8:00 US FOMC Member Quarles Speaks
  • 9:15 US FOMC Member Williams Speaks
  • 9:45 US Final Manufacturing PMI. Estimate 55.4
  • 10:00 US ISM Manufacturing PMI. Estimate 57.5
  • 10:00 US Construction Spending. Estimate 0.4%
  • 10:00 US ISM Manufacturing PMI. Estimate 70.1
  • All Day – US Total Vehicle Sales. Estimate 17.3M
  • 10:30 US FOMC Member Brainard Speaks

Tuesday (December 4)

  • 5:00 Eurozone PPI. Estimate 0.5%

*All release times are EST

*Key events are in bold

EUR/USD for Monday, December 3, 2018

EUR/USD for December 3 at 5:50 EST

Open: 1.1318 High: 1.1380 Low: 1.1318 Close: 1.1347

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1120 1.1212 1.1300 1.1434 1.1553 1.1685

EUR/USD posted small gains in the Asian session and is showing little movement in European trade

  • 1.1300 is providing support
  • 1.1434 is the next line of resistance
  • Current range: 1.1300 to 1.1434

Further levels in both directions:

  • Below: 1.1300, 1.1212, 1.1120 and 1.0992
  • Above: 1.1434, 1.1553 and 1.1685

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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.