EUR/USD – Thin Trading Ahead of US Holiday

EUR/USD has edged higher in Thursday trading, as the pair trades just under the 1.36 line. In economic releases, US Unemployment Claims looked sharp for the second straight week, but manufacturing releases were weak. US markets are closed on Thursday for the Thanksgiving holiday, so we could see a quiet day from EUR/USD. Over in the Eurozone, German Unemployment Change disappointed the markets, with a reading which was higher than expected.

For a second straight week, US Unemployment Claims dropped and came in lower than market expectations, although the euro managed to hold its own despite this. With increasing speculation about a QE taper, employment releases will remain under the market microscope. If employment numbers continue to improve, we can expect the Fed to scale down QE early in 2014, which would likely give a big boost to the US dollar.

In Germany, Unemployment Change moved upwards in October, increasing by 10 thousand claims. The markets had expected no change in the reading. The country’s unemployment rate remained at 6.9%, better than other members of the Eurozone but considered high for Germany, the region’s largest economy. Recent German indicators have looked strong, as Consumer Climate hit a multi-year high, and Business Climate and PMIs beat their estimates. Meanwhile, German Chancellor Angela Merkel’s CDU party has reached an agreement with the Social Democrats to form a coalition, two months after her victory in national elections. This will be her third term in office. Merkel has been opposed to joint liability for Eurozone members in debt, and this policy will likely continue under the new government.

We’ve heard plenty about the lack of inflation and growth in the Eurozone, and the ECB is considering further monetary action to shake the economy out of its slumber. Despite all this, the euro continues to look sharp, and has gained about 250 points against the US dollar in the last two weeks. However, the euro still is well below the levels we saw in late October, when EUR/USD was trading around 1.38.

EUR/USD for Thursday, November 28, 2013

EUR/USD November 28 at 10:50 GMT

EUR/USD 1.3598 H: 1.3618 L: 1.354

EUR/USD Technical

• EUR/USD has edged higher in Thursday trading, as the pair trades close to the 1.36 level.
• On the downside, the 1.3585 is providing support. This is a weak line which could face pressure during the day. This is followed by a support line at the round number of 1.3500.
• The pair is facing resistance at 1.3649. Next, there is resistance at 1.3786, which has remained intact since late October.
• Current range: 1.3585 to 1.3649

Further levels in both directions:

• Below: 1.3585, 1.3500, 1.3410, 1.3325 and 1.3265
• Above: 1.3649, 1.3786, 1.3893 and 1.4000

OANDA’s Open Positions Ratio

EUR/USD ratio is showing gains in long positions in Thursday trading. This is reflected in the pair’s movement, as the euro continues has posted slight gains. A large majority of the open positions remain short, indicative of a trader bias towards the dollar reversing direction and posting gains against the euro.

The pair remains close to the 1.36 line. With the US markets closed for Thanksgiving, we can expect limited movement from EUR/USD during the North American session.

EUR/USD Fundamentals

• 7:00 German Import Prices. Estimate -0.2%. Actual -0.7%.
• All Day – German Preliminary CPI. Estimate 0.1%.
• 8:55 German Unemployment Change. Estimate 0K. Actual 10K.
• 9:00 Eurozone M3 Money Supply. Estimate 1.8% Actual 1.4%.
• 9:00 Eurozone Private Loans. Estimate -1.9%. Actual -2.1%.
• 9:10 Eurozone Retail PMI. Actual 48.0 points.
• 9:18 Italian 10-year Bond Auction. Actual 4.01%.
• 10:10 Spanish HPI. Actual -0.4%.

*Key releases are highlighted in bold

*All release times are GMT

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