EUR/USD – Euro Slips Under 1.08 as Slide Continues

EUR/USD has posted losses on Tuesday, as the pair trades at 1.0770 in the European session. In economic news, Eurozone CPI posted a gain of 0.2%, short of the forecast. On the bright side, German and Spanish Unemployment Change declined more than expected. There are no major US releases on the schedule.

The euro continues its downward slide, as EUR/USD is down some 170 points since December 31st. The pair is trading at its lowest levels since December 3, the date on which the euro posted huge gains following the ECB policy meeting which saw the ECB balk at any significant monetary moves. Economic data out of the Eurozone is certainly not helping matters. Eurozone annual inflation came in at 0.2%, short of the estimate of 0.4%. The key indicator was dismal in 2015, in which its strongest monthly gain was only 0.3%. Eurozone Core CPI was stronger, with a 0.9% gain, but the inflation picture in the bloc remains bleak at the start of 2016. There was better news from employment numbers, as German Unemployment Change dropped by 14 thousand, much better than the predicted decline of 7 thousand.

The US economy showed strong improvement in 2015, but there are sectors which have lagged behind the recovery, such as the manufacturing industry. Recent manufacturing releases have missed expectations, and the negative trend continued on Monday. ISM Manufacturing PMI, a key indicator, slipped to 48.2 points, well short of the forecast of 49.1 points. This weak reading is raising concerns, since it marks back-to back releases below the 50-point level, which separates expansion from contraction. It is also the sixth consecutive month that the PMI has softened. As well, ISM Manufacturing Prices dipped to 33.5 points, well below expectations.

EUR/USD Fundamentals

Tuesday (Jan. 5)

  • 8:00 Spanish Unemployment Change. Estimate -52.6K. Actual -55.8K
  • 8:55 German Unemployment Change. Estimate -7K. Actual -14K
  • 10:00 Eurozone CPI Flash Estimate. Estimate 0.4%. Actual 0.2%
  • 10:00 Eurozone Core CPI Flash Estimate. Estimate 1.0%. Actual 0.9%
  • 10:00 Italian Preliminary CPI. Estimate 0.1%. Actual 0.0%
  • All Day – US Total Vehicle Sales. Estimate 18.1M

*Key Events are in bold

*All release times are GMT

EUR/USD for Tuesday, January 5, 2016

EUR/USD January 5 at 10:50 GMT

EUR/USD 1.0777  H: 1.0838 L: 1.0765

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0537 1.0659 1.0732 1.0847 1.0941 1.1087
  • The pair was flat in the Asian session and has posted losses in European trade.
  • 1.0732 is a weak support level
  • 1.0847 remains busy and has switched to a resistance role following losses by the euro
  • Current range: 1.0732 to 1.0847

Further levels in both directions:

  • Below: 1.0732, 1.0659 and 1.0537
  • Above: 1.0847, 1.0941, 1.1087 and 1.1172

OANDA’s Open Positions Ratio

The EUR/USD ratio remains unchanged. Short positions command a strong majority (59%), indicative of trader bias towards the euro continuing to move downwards.

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.