EUR/USD – Euro drifting as German and Eurozone Services PMI within expectations

EUR/USD is almost unchanged in the Wednesday session. Currently, the pair is trading at 1.1338, down 0.05% on the day. On the release front, German and eurozone services PMIs both softened in November. German Final Services PMI dropped to 53.3, matching the estimate. Eurozone Final Services PMI dipped to 53.4, above the estimate of 53.1. Eurozone retail sales posted a gain of 0.3%, marking a 4-month high. This beat the estimate of 0.2%. On Thursday, OPEC members are meeting in Vienna. The US will release ADP nonfarm payrolls, unemployment claims and the ISM Non-Manufacturing PMI.

In France, the ‘yellow vest’ protests are continuing, despite the about-face by the government, which agreed to suspend a controversial fuel tax. The riots have paralyzed Paris, and hotels and restaurants have been particularly affected. The demonstrations began in protest of the fuel tax, but have grown into a massive protest against the Macron government. If the protests continue, French GDP for the fourth quarter could be negatively affected.

German Services PMI dropped to its lowest level since April, as the eurozone’s largest economy continues to post weak numbers in the fourth quarter. On Monday, Manufacturing PMI dropped to 51.8 in November, down from 52.2 points in October. This marked a fourth straight downturn and was the lowest reading since April 2016. The global trade war has taken a bite out of German exports and a slowdown in the eurozone economy has dampened manufacturing growth in Germany. Consumer indicators are also pointing downwards – last week, GfK Consumer Climate dipped to an 18-month low. while retail sales fell by 0.3%, its first decline since July. Consumers are holding tighter to the purse strings, which is hurting economic growth. This does not bode well for the eurozone economy, as the German economy is often a bellwether for the rest of the eurozone.

It’s looking Ugly, hopefully time for a pause

EUR/USD Fundamentals

Wednesday (December 5)

• 3:15 Spanish Services PMI. Estimate 53.9. Actual 54.0
• 3:30 ECB President Draghi Speaks
• 3:45 Italian Services PMI. Estimate 49.2. Actual 50.3
• 3:50 French Final Services PMI. Estimate 55.0. Actual 55.1
• 3:55 German Final Services PMI. Estimate 53.3. Actual 53.3
• 4:00 Eurozone Final Services PMI. Estimate 53.1. Actual 53.4
• 5:00 Eurozone Retail Sales. Estimate 0.2%
• Tentative – Spanish 10-year Bond Auction
• 14:00 US Beige Book
• 20:15 US FOMC Member Quarles Speaks

Thursday (December 6)

• 2:00 German Factory Orders. Estimate -0.4%
• All Day – OPEC Meetings
• 8:15 US ADP Nonfarm Employment Change. Estimate 196K
• 8:30 US Unemployment Claims. Estimate 226K
• 10:00 US ISM Non-Manufacturing PMI. Estimate 59.2
• 18:45 US Federal Reserve Chair Powell Speaks

*All release times are EST

*Key events are in bold

EUR/USD for Wednesday, December 5, 2018

EUR/USD for December 5 at 7:00 EST

Open: 1.1344 High: 1.1346 Low: 1.1317 Close: 1.1382

EUR/USD Technical

EUR/USD ticked lower in the Asian session and has posted small gains 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

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.