EUR/USD – Euro drifting, euro confidence sags

EUR/USD is showing limited movement in the Tuesday session. Currently, the pair is trading at 1.1316, up 0.04% on the day. On the release front, eurozone Sentix Investor Confidence declined by 3.3 points, missing the estimate of 2.3 points. This marked the sixth decline in seven months. The markets are braced for weak U.S. inflation reports. PPI is expected to come in at 0.1%, while core PPI is projected to post a gain of 0.2%. On Wednesday, Mario Draghi speaks at an ECB event in Frankfurt. The U.S. will post consumer inflation numbers.

The U.S. dollar has settled down, after a rough week. EUR/USD jumped 1.5% last week, on a combination of factors. First, comments from Federal Reserve president Jerome Powell have set the stage for a rate cut in the coming months. Since raising rates in December, the Fed has been neutral with regard to the direction of the next rate move, but rising trade tensions have raised fears of a slowdown in the U.S. economy. This has prompted the Fed to reconsider a rate cut later this year. The CME Group has projected a 64% likelihood of a 0.25% rate cut, up sharply from a month ago, when the odds of a cut were just 16%.

Secondly, there was dismal news on the employment front. Nonfarm payrolls posted its second dismal reading in four months. In May, the economy created only 75 thousand jobs, down from 263 thousand a month earlier. Wage growth was unchanged at 0.2%, shy of the estimate of 0.3%. Despite these soft job numbers, the U.S. labor market is in strong shape, and the greenback could quickly bounce back.

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EUR/USD Fundamentals

Tuesday (June 11)

• 4:30 Eurozone Sentix Investor Confidence. Estimate 2.3. Actual -3.3
  
• 5:16 US NFIB Small Business Index. Estimate 102.3. Actual 105.0
  
• 8:30 US Core PPI. Estimate 0.2%
• 8:30 US PPI. Estimate 0.1%

Wednesday (June 12)

• 4:15 ECB President Mario Draghi Speaks
• 8:30 US CPI. Estimate 0.1%
• 8:30 US Core CPI. Estimate 0.2%

*All release times are DST

*Key events are in bold

EUR/USD for Tuesday, June 11, 2019

EUR/USD for June 11 at 7:10 DST

Open: 1.1312 High: 1.1332 Low: 1.1308 Close: 1.1316

EUR/USD Technical

EUR/USD has shown little movement in the Asian and European sessions

• 1.1300 is a weak support line
• 1.1434 is the next resistance line
• Current range: 1.300 to 1.1434

Further levels in both directions:

• Below: 1.1300, 1.1212, 1.1120 and 1.1046
• Above: 1.1434, 1.1553 and 1.1621

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