EUR/USD – Euro Limited in Movement on US Bank Holiday

EUR/USD continues to drift this week, as the pair trades at 1.0740 in Wednesday’s European session. In economic news, there are no economic releases out of the Eurozone or the US. There is only one event on the schedule, a speech from ECB head Mario Draghi at a BOE forum in London. We could see some movement from the pair on Thursday, as the US releases Unemployment Claims. Federal Reserve head Janet Yellen speaks at event in Washington. As well, Mario Draghi testifies before the Committee on Economic and Monetary Affairs in Brussels.

EUR/USD posted sharp losses late last week, following the strong NFP reading, which crushed the estimate and increased the likelihood of a rate increase by the Federal Reserve in December hike. Still, traders should keep in mind that the Fed has been split over a rate hike, and many members will be hesitant to vote in favor of raising rates unless they are confident that the US economy can withstand an interest rate hike. Employment numbers out of the US have certainly improved, with recent indicators such as the unemployment rate pointing to close to full employment in the US economy. At the same time, other indicators have not fared as well, particularly manufacturing data and inflation levels. While a rate hike in December is back on the front burner, it is by no means a done deal, making for plenty of speculation on the part of markets players in the next several weeks regarding a possible move by the Fed.

Meanwhile, the Eurozone economy continues to sputter. Germany, the locomotive of the Eurozone, continues to post disappointing numbers. On Monday, German Trade Balance was weaker than expected. The trade surplus narrowed to EUR 19.4 billion, shy of the estimate of EUR 20.3 billion. It was Germany’s smallest trade surplus in seven months. As well, the country’s manufacturing sector is in trouble, as underscored by last week’s releases. Factory Orders slipped 1.7%, and Industrial Orders followed on Friday with a decline of 1.1%, well off the estimate of +0.6%. Weaker manufacturing data can be blamed on weaker demand from China and Russia. Recent soft numbers out of Germany and the Eurozone underscore a weak Eurozone economy and add to the pressure on the ECB to increase stimulus, a step which ECB head Mario Draghi has hinted that could happen as early as December. With the Eurozone suffering from weak growth and a lack of inflation, unless Eurozone, particularly German releases show marked improvement, the euro could be in for more turbulence.

EUR/USD Fundamentals

Wednesday (Nov. 11)

• 13:15 ECB President Mario Draghi Speaks

Upcoming Key Releases

Thursday (Nov. 12)

• 8:30 ECB President Mario Draghi Speaks
• 10:30 ECB President Mario Draghi Speaks
• 13:30 US Unemployment Claims. Estimate 270K
• 14:30 Federal Reserve Chair Janet Yellen Speaks

*Key releases are highlighted in bold

*All release times are GMT

EUR/USD for Wednesday, November 11, 2015

EUR/USD November 11 at 11:10 GMT

EUR/USD 1.0739 H: 1.0774 L: 1.0729

EUR/USD Technical

• EUR/USD posted slight gains in the Asian session but gave up these gains in the European session.
• 1.0847 is an immediate resistance line.
• On the downside, 1.0732 was tested earlier and remains under strong pressure.
• Current range: 1.0732 to 1.0847

Further levels in both directions:

• Below: 1.0732, 1.0659 and 1.05
• Above: 1.0847, 1.0941, 1.1017 and 1.1105

OANDA’s Open Positions Ratio

EUR/USD ratio is showing slight movement towards short positions and is close to an even split (49:51). This indicates a lack of trader bias as to what direction the pair will take next.

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.