EUR/USD – Euro Slips to 2-Week Low as Stock Market Turmoil Continues

The euro has edged downwards on Thursday. Currently, the pair is trading at 1.2228, down 0.29% on the day. On the release front, Germany’s trade surplus narrowed to EUR 21.4 billion, just shy of the estimate of EUR 21.5 billion. In the US, the key event is unemployment claims, which is expected to edge up 232 thousand. On Friday, France releases Industrial Production.

The euro has been under pressure for most of the week, and is down 1.8 percent against the dollar. The greenback has benefited from sharp volatility in global stock markets this week. The week started with the Dow Jones posting its biggest one-day loss, and the markets have been choppy throughout the week. US markets were in the red on Wednesday, and this has weighed on European stock markets and the euro in the Thursday session. Investors are concerned that inflation could rise in the US, which in turn would trigger additional rate hikes from the Fed. This would make the US dollar more attractive against the euro and other currencies.

After months of political uncertainty, Germany appears on the verge of forming a new government. On Wednesday, the socialist SDP and Angela Merkel’s conservatives announced that they had finalized a coalition agreement. In the last government, the SDP was the junior partner of the conservatives, but this time around the SDP has extracted major concessions from Merkel, notably control of the powerful finance ministry. This will likely mark a shift in Germany’s eurozone policy, which had been marked by a conservative stance under former finance minister Wolfgang Schaeuble. The weaker members of the eurozone, such as Greece, will likely find a more sympathetic ear for financial help from the SDP than they did from Schauble. The coalition agreement still requires the consent of a majority of the 464,000 members of the SDP, but is expected to pass this final hurdle.

Market Jitters Remain/strong

EUR/USD Fundamentals

Thursday (February 8)

  • 2:00 German Trade Balance. Estimate 21.5B. Actual 21.4B
  • 3:45 German Buba President Weidmann Speaks
  • 4:00 ECB Economic Bulletin
  • 8:30 US Unemployment Claims. Estimate 232K
  • Tentative – US Mortgage Delinquencies
  • 10:30 US Natural Gas Storage. Estimate -116B
  • 13:01 US 30-year Bond Auction

Friday (February 9)

  • 2:45 French Industrial Production. Estimate 0.1%

*All release times are GMT

*Key events are in bold

EUR/USD for February 8, 2018

EUR/USD for February 8 at 5:45 EDT

Open: 1.2264 High: 1.2295 Low: 1.2232 Close: 1.2234

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1961 1.2092 1.2200 1.2286 1.2357 1.2481

EUR/USD edged higher in the Asian session. The pair has reversed directions in European trade and is moving downards

  • 1.2200 has switched to a support role after losses by EUR/USD on Tuesday
  • 1.2286 is the next resistance line

Further levels in both directions:

  • Below: 1.2200, 1.2092 and 1.1961
  • Above: 1.2286, 1.2357, 1.2481 and 1.2569
  • Current range: 1.2200 to 1.2286

OANDA’s Open Positions Ratio

EUR/USD ratio has shown strong movement towards long positions. Currently, short positions have a majority (57%), indicative of EUR/USD reversing directions and moving higher.

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.