EUR/USD – Euro touches 3-week high, investors eye Draghi testimony

EUR/USD has posted gains in the Monday session. Currently, the pair is trading at 1.1774, up 0.23% on the day. On the release front, Germany’s trade surplus widened to EUR 20.3 billion, matching the estimate. Eurozone Sentix Investor Confidence dropped to 12.1, but this beat the forecast of 9.0 points. ECB President Mario Draghi is testifying at the European Parliament Economic and Monetary Affairs Committee. On Tuesday, Germany and Eurozone ZEW Economic Sentiment are expected to post declines. The U.S will release JOLTS Jobs Openings.

U.S employment data was a mix on Friday, as job growth remained above the 200-thousand level, but wage growth faltered. Nonfarm payrolls dropped to 213 thousand, but this beat the estimate of 195 thousand. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S and China.

EUR/USD showed little response to the FOMC minutes, which were released on Thursday. The minutes were somewhat dovish in tone, as policymakers gave a thumbs-up to the strong U.S economy, but expressed concern about developments abroad. These include growing trade tensions with U.S trading partners, as well as political and economic developments in Europe. The minutes also reiterated the Fed’s support for a “gradual” raise in interest rates. The markets are circling the September policy meeting for the next rate hike, with the CME Group setting the odds of a quarter-point hike at 80%.

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EUR/USD Fundamentals

Monday (July 9)

• 2:00 German Trade Balance. Estimate 20.3B. Actual 20.3B
• 4:30 Eurozone Sentix Investor Confidence. Estimate 9.0. Actual 12.1
• 9:00 ECB President Draghi Speaks
• 11:00 ECB President Draghi Speaks
• 15:00 US Consumer Credit. Estimate 12.2B

Tuesday (July 10)

• 5:00 German ZEW Economic Sentiment. Estimate -17.9
• 5:00 Eurozone ZEW Economic Sentiment. Estimate -13.2
• 10:00 US JOLTS Job Openings. Estimate 6.88M

*All release times are DST

*Key events are in bold

EUR/USD for Monday, July 9, 2018

EUR/USD for July 9 at 6:40 DST

Open: 1.1747 High: 1.1781 Low: 1.1741 Close: 1.1767

EUR/USD Technical

EUR/USD edged higher in the Asian session and has been flat in European trade

• 1.1728 is providing support
• 1.1829 is a weak resistance line

Further levels in both directions:

• Below: 1.1728, 1.1637, 1.1553 and 1.1434
• Above: 1.1829, 1.1910 and 1.2026
• Current range: 1.1728 to 1.1829

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