EUR/USD – Euro Kicks Off Week Unchanged

EUR/USD is unchanged as we start the new trading week, as the pair is trading at 1.1350 early in Monday’s European session. There are no major releases out of the Eurozone or the US. The German central bank released its monthly report earlier in the day. In the US, we’ll hear from two Fed FOMC members. The sole economic report is the NAHB Housing Market Index, which is expected to remain steady at 62 points. Traders should keep an eye on US Building Permits, a market-mover which will be released on Tuesday.

US key releases on Friday were a mixed bag. UoM Consumer Sentiment, the primary gauge of consumer confidence, jumped to 92.1 points in October, up from 85.7 points. This easily beat the estimate of 88.8 points. At the same time, JOLTS Job Openings slipped to 5.37 million, way off the estimate of 5.77 million. The JOLTS release is especially important as it is watched closely by the Fed and is a factor in its decision-making process regarding monetary policy.

Meanwhile, US manufacturing numbers in October were dismal. The Empire State Manufacturing Index posted its third straight decline, coming in at -11.4 points, missing the forecast of -7.3 points. The Philly Fed Manufacturing Index, a key release, came in at -4.5 points, shy of the estimate of -1.8 points. These figures point to contraction in the US manufacturing sector, which continues to suffer from weak global demand.

US Federal Reserve policymakers seem divided on the question of a rate hike in 2015. This was underscored last week by FOMC member Lael Brainard, who stated that the Fed should not raise rates before global economic conditions improve. Brainard noted that the Chinese slowdown has caused economic turmoil worldwide, and the US economy could lose steam due to weaker exports and weak global economic conditions. On the other end of the spectrum, another member of the FOMC, Dennis Lockhart, sounded more optimistic about a rate hike before the end of 2015. Lockhart did not rule out a rate hike in October, and added that the Fed would have more data to evaluate before its December policy meeting. With FOMC members sending out such conflicting messages, exasperated markets have been unable to get a handle on the timing of a rate hike, and this failure of the Fed to communicate a clear message continues to lead to uncertainty in the markets.

EUR/USD Fundamentals

Monday (Oct. 19)

• 6:00 German Buba Monthly Report.
• 14:00 Fed FOMC Member Lael Brainard Speaks.
• 14:00 NAHB Housing Market Index. Estimate 62 points.
• 12:30 Fed FOMC Member Jeffrey Lacker Speaks.

Upcoming Releases

Tuesday (Oct. 20)

• 12:30 US Building Permits. Estimate 1.16M

*Key releases are highlighted in bold

*All release times are GMT

EUR/USD for Monday, October 19, 2015

EUR/USD October 19 at 9:10 GMT

EUR/USD 1.1350 H: 1.1395 L: 1.1339

EUR/USD Technical

• EUR/USD was steady in the Asian session and has posted slight losses in European trading.
• 1.1296 is an immediate support line.
• 1.1392 is a weak resistance line.
• Current range: 1.1296 to 1.1392

Further levels in both directions:

• Below: 1.1296, 1.1214, 1.1105 and 1.1017
• Above: 1.1392, 1.1470, 1.1658, 1.1712 and 1.1871

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged on Monday, consistent with the lack of movement from EUR/USD. Long positions retain a strong majority of the open positions (62%), which points to trader sentiment in favor of the dollar gaining ground against the euro.

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.