EUR/USD – Euro Improves to 2-Week High as Eurozone Retail PMI Climbs

EUR/USD has posted gains in the Wednesday session. Currently, the pair is trading at 1.1770, up 0.43% on the day. On the release front, there are no major events in the Eurozone or U.S. Eurozone Retail PMI improved to 51.7 points. On Thursday, the U.S releases unemployment claims.

With the eurozone economy continuing to improve and inflation moving higher, ECB policymakers are focused on the question of whether it’s time to wind up the bank’s bond purchase program. The ECB currently buys EUR 30 billion each month, and the scheme is scheduled to end in September. The bank has extended the program in the past, but stronger economic conditions have strengthened the case to finally end stimulus. The ECB has not formally discussed the issue, leaving the markets to hunt for any clues about the bank’s plans. On Wednesday, ECB chief economist Peter Praet said that the ECB would commence discussing the issue next week, when the Governing Council meets in Riga, Latvia. Many policymakers favor a gradual reduction in stimulus over several months, rather than completely turning off the tap in September. If the ECB makes any announcements regarding further tapering, we could see some strong movement from EUR/USD.

The on-again-off-again Korea nuclear summit is back on, complete with a starting time. The much-heralded meeting between President Trump and President Kim Jong-un will take place in Singapore on June 12, at 9:00 AM sharp. The summit will mark the face ever face-to-face meeting between leaders of the U.S and North Korea, but Trump has tried to lower expectations, saying that he doesn’t expect the sides to sign an agreement. Rather, the meeting would mark the start of a process. North Korea is unlikely to agree to denuclearization, but the fact that progress is being made could boost investor risk appetite.

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EUR/USD Fundamentals

Wednesday (June 6)

• 4:10 Eurozone Retail PMI. Actual 51.7
• 8:30 US Revised Nonfarm Productivity. Estimate 0.7%
• 8:30 US Revised Unit Labor Costs. Estimate 2.7%
• 8:30 US Trade Balance. Estimate -50.0B
• 10:30 US Crude Oil Inventories. Estimate -2.0M

Thursday (June 7)

• 2:00 German Factory Orders. Estimate 0.7%
• 5:00 Eurozone Revised GDP. Estimate 0.4%
• 8:30 US Unemployment Claims. Estimate 223K

*All release times are DST

*Key events are in bold

EUR/USD for Wednesday, June 6, 2018

EUR/USD for June 6 at 6:10 DST

Open: 1.1718 High: 1.1775 Low: 1.1712 Close: 1.1770

EUR/USD Technical

EUR/USD was flat in the Asian session and has posted slight gains in European trade

• 1.1718 is a weak support line
• 1.1809 is the next resistance line

Further levels in both directions:

• Below: 1.1718, 1.1613, 1.1448 and 1.1312
• Above: 1.1809, 1.1915 and 1.1996
• Current range: 1.1718 to 1.1809

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged in the Wednesday session. Currently, long positions have a majority (59%), indicative of trader bias towards EUR/USD breaking out and climbing to higher ground.

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.