EUR/USD – Euro drifting as investors await U.S nonfarm payrolls

EUR/USD is almost unchanged in the Friday session. Currently, the pair is trading at 1.1375, down 0.01% on the day. It’s a busy day for economic indicators on both sides of the pond. German industrial production disappointed with a decline of 0.3%, shy of the estimate of 0.5%. Later in the day, the eurozone releases employment change and revised GDP for the third quarter. Both indicators are expected to dip to 0.2%. In the U.S, the focus in on employment numbers, highlighted by wage growth and nonfarm payrolls. The week wraps up with UoM consumer confidence.

U.S employment data was soft on Thursday, raising concerns that the red-hot labor market could be slowing down. The November ADP nonfarm payrolls was expected to drop, but the plunge was much sharper than expected. The indicator fell to 175 thousand, missing the estimate of 195 thousand. If this is a precursor of the official nonfarm payrolls report on Friday, the U.S dollar could retreat against its major rivals. Unemployment claims also disappointed, as the reading of 231 thousand was above the forecast of 226 thousand. There was better news from the services sector, as ISM Non-Manufacturing PMI improved to 60.7, easily beating the estimate of 59.1 points.

Nervous investors continue to fret over the U.S-China trade war. There was some optimism early in the week after President Trump agreed to suspend further tariffs against China for 90 days. However, there are concerns that the two sides will not be able to close the gaps in their positions in just a few weeks. The markets soured on Thursday, after a senior Chinese executive, Meng Wanzhou, was arrested in Vancouver for allegedly violating trade sanctions against Iran. Wanzhou faces extradition to the U.S., and China’s indignant response to the arrest could torpedo upcoming trade talks between the two countries.

European open – Anxiety ahead of US jobs data

EUR/USD Fundamentals

Friday (December 7)

• 2:00 German Industrial Production. Estimate 0.3%. Actual -0.5%
• 2:45 French Industrial Production. Estimate 0.8%. Actual 1.2%
• 2:45 French Trade Balance.  Estimate -5.9B. Actual -4.1B
• 4:00 Italian Retail Sales. Estimate -0.2%. Actual 0.1%
• 5:00 Eurozone Final Employment Change. Estimate 0.2%
• 5:00 Eurozone Revised GDP. Estimate 0.2%
• 8:30 US Average Hourly Earnings. Estimate 0.3%
• 8:30 US Nonfarm Employment Change. Estimate 200K
• 8:30 US Unemployment Rate. Estimate 3.7%
• 10:00 US Preliminary UoM Consumer Sentiment. Estimate 97.1
• 10:00 US Final Wholesale Inventories .Estimate 0.7%
• 10:00 US Preliminary UoM Inflation Expectations
• 10:30 US Natural Gas Storage. Estimate -57B
• 12:00 US FOMC Member Brainard Speaks
• 15:00 US Consumer Credit. Estimate 15.1B

*All release times are EST

*Key events are in bold

EUR/USD for Friday, December 7, 2018

EUR/USD for December 7 at 4:20 EST

Open: 1.1377 High: 1.1384 Low: 1.1360 Close: 1.1375

EUR/USD Technical

EUR/USD was flat in the Asian session and has ticked higher in European trade

• 1.1300 is providing support
• 1.1434 is the next resistance line
• Current range: 1.1300 to 1.1434

Further levels in both directions:

• Below: 1.1300, 1.1212, 1.1120 and 1.0992
• Above: 1.1434, 1.1553 and 1.1685

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