EUR/USD – All Quiet Before ECB Rate Decision

EUR/USD is listless, as the pair continues to trade in the low-1.35 range in Thursday trading. We could see some movement from the pair after the ECB rate decision later today. In the US, there are two key events on the schedule – Trade Balance and the all-important Unemployment Claims.

All eyes are on the ECB, which sets its benchmark interest rate for February later today. With the benchmark interest rates at record low levels of 0.25%, clearly there isn’t much to cut, although a 0.1% reduction is a possibility. Mario Draghi’s press conferences have been market-movers in the past and the ECB head could well have a surprise up his sleeve, such as negative deposit rates. With the exception of Germany, the Eurozone continues to struggle with little growth and low inflation. Will the ECB take action or keep a steady course? Whatever, the answer, traders should be prepared for some movement by the euro during the day.

ADP Non-Farm Employment disappointed in the January reading, sliding to 175 thousand, compared to 238 thousand a month earlier. This was well shy of the estimate of 191 thousand. Is the ADP release a prelude to grim tidings from Non-Farm Payrolls on Friday? If the NFP falters as well, the Fed could delay its next QE taper and the fallout from such a negative message could hurt the US dollar.

Eurozone PMIs looked solid in January, and this could be a factor in what action the ECB decides what action to take at today’s rate announcement. The Spanish and Eurozone releases came in above the 50-point line, pointing to expansion. Italian Services PMI also improved, but remains in contraction mode. These numbers come on the heels of Manufacturing PMIs which also looked solid. At the same time, Eurozone Retail Sales slipped 1.6%, well off the estimate of a 0.7% decline. This key consumer spending indicator has posted declines in three of the past four readings, pointing to weak consumer spending, which is a key component of economic growth.

In Spain, Unemployment Change jumped to 113 thousand in January, shocking the markets which had expected a decrease. The Spanish employment minister tried to put a positive spin on the data, noting that January unemployment numbers typically climb sharply, and this figure was the lowest January increase since 2007. Recent Spanish data has looked strong, but clearly the staggering unemployment levels will continue to weigh on the economy.


EUR/USD for Thursday, February 6, 2014

Forex Rate Graph 21/1/13

EUR/USD February 6 at 10:45 GMT

EUR/USD 1.3515 H: 1.3540 L: 1.3530


EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3267 1.3347 1.3410 1.3585 1.3649 1.3786


  • EUR/USD continues to show little movement in Thursday trading, trading slightly above the 1.35 line.
  • 1.3410 continues to provide support. This is followed by a support line at 1.3347.
  • 1.3585 is the first line of resistance. This is followed by resistance at 1.3649.
  • Current range: 1.3410 to 1.3585

Further levels in both directions:

  • Below: 1.3410, 1.3347, 1.3267 and 1.3189
  • Above: 1.3585, 1.3649, 1.3786, 1.3893 and 1.4000


OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged in Thursday trading continuing a pattern we have seen for most of the week. This is reflected in the pair’s current movement, which continues to show little movement. Short positions are the majority in the ratio, indicative of trader bias towards the dollar breaking out and gaining ground against the euro.

We’re seeing more of the same from EUR/USD, which has been showing little movement throughout the week. With the ECB rate decision and US Unemployment Claims on today’s schedule, we could be in for some volatility from the pair.


EUR/USD Fundamentals

  • 9:10 Eurozone Retail PMI. Actual 50.5 points.
  • 9:59 French 10-year Bond Auction. Actual 2.25%.
  • 11:00 German Factory Orders. Estimate 0.3%.
  • 12:30 US Challenger Job Cuts.
  • 12:45 ECB Minimum Bid Rate. Estimate 0.25%.
  • 13:30 ECB Press Conference.
  • 13:30 US Trade Balance. Estimate -35.8B.
  • 13:30 US Unemployment Claims. Estimate 337K.
  • 13:30 US Preliminary Nonfarm Productivity. Estimate 2.8%.
  • 13:30 US Preliminary Unit Labor Costs. Estimate -0.7%.
  • 15:00 US FOMC Member Daniel Tarullo Speaks.
  • 15:30 US Natural Gas Storage. Estimate -270B.


*Key releases are highlighted in bold

*All release times are GMT


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 analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.