EUR/USD – Euro Steadies After Friday Slide

EUR/USD has ticked higher in the Monday session. Currently, the pair is trading at the 1.18 line, up 0.24% on the day. On the release front, German Industrial Orders disappointed with a decline of 1.1%, compared to the estimate of +0.2%. The Eurozone Sentix Investor Confidence slowed to 27.7, just shy of the forecast of 27.8 points. There are no major US releases on the schedule. On Tuesday, the US releases JOLTS Jobs Openings, which is expected to edge lower to 5.66 million.

The euro climbed above the 1.19 line on Thursday, its highest level since January 2015. However, the currency lost 1.2% on Friday, as a strong US nonfarm payrolls report boosted the US dollar. The markets had forecast a sharp slowdown of 182 thousand, but the reading of 209 thousand easily beat the estimate. The unemployment rate edged lower to 4.3%, but wage growth remains soft, and was unchanged at 0.3%.

The markets have grown accustomed to strong German numbers, so July’s Industrial Production was a nasty surprise, posting a sharp decline of 1.1%. This marked the weakest reading this year. Still, German indicators continue to point to an expanding German economy. Retail Sales jumped 1.1%, its second-highest gain in 2017. Factory Orders gained 1.0%, while unemployment claims dropped 9 thousand – the employment indicator has declined every month in 2017, except one. Although manufacturing and services PMIs dipped in July, both are well over the 50-level, indicative of expansion. Are the strong German numbers too much of a good thing? Some analysts think so, and are cautioning that the German economy is in danger of overheating. The eurozone economy has also benefited from the robust German economy. Eurozone GDP gained 0.6% in the second quarter, up from 0.5% in the previous quarter. As well, Eurozone Retail Sales gained 0.5%, marking a 4-month high.

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EUR/USD Fundamentals

Monday (August 7)

• 2:00 German Industrial Production. Estimate 0.2%. Actual -1.1%
• 4:30 Eurozone Sentix Investor Confidence. Estimate 27.8. Actual 27.7
• 10:00 US Labor Market Conditions Index
• 13:25 US FOMC Member Neel Kashkari Speaks
• 15:00 US Consumer Credit. Estimate 15.6B

Tuesday (August 8)

• 10:00 US JOLTS Job Openings. Estimate 5.66M

*All release times are GMT

*Key events are in bold

EUR/USD for Monday, August 7, 2017

EUR/USD Monday, August 7 at 6:25 EDT

Open: 1.1777 High: 1.1814 Low: 1.1776 Close: 1.1801

EUR/USD Technical

EUR/USD edged higher in the Asian session. In the European session, the pair continued to move upwards but has retracted

• 1.1712 is providing support
• 1.1876 is the next resistance line

Further levels in both directions:

• Below: 1.1712, 1.1616 and 1.1534
• Above: 1.1876, 1.1996, 1.2108 and 1.2221
• Current range: 1.1712 to 1.1876

OANDA’s Open Positions Ratio

In the Monday session, EUR/USD ratio is showing short positions with a majority (59%). This is indicative of EUR/USD reversing directions and moving downwards.

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