EUR/USD – Euro subdued in light-data session

EUR/USD has paused on Friday, after gaining ground on Thursday. Currently, the pair is trading at 1.1193, up 0.10% on the day. There are no German or eurozone events on the schedule. Today’s highlight is U.S. durable goods orders, with the markets braced for soft numbers. Durable goods orders is expected to decline 2.0% in April, after a strong gain of 2.7% in March. The core reading is expected to slow to 0.1%, down from 0.4% in the previous release. It’s Day 2 of the EU election, with results to be published on Sunday night, after all EU members have voted.

It’s been a quiet month of May for EUR/USD. The currency posted a modest gain of 0.28% on Thursday, the strongest move in either direction this month. Friday could be a quiet day, unless durable goods reports yield unexpected results. The euro managed to scratch gains despite weak German numbers. Manufacturing PMI dropped to 44.3 in April, marking a fifth straight contraction. Services PMIs continue to point to expansion, but the April score fell to 55.0, down from 55.6 a month earlier. There is also concern about business confidence, as Ifo Business Climate slowed to 97.9, shy of the estimate of 99.2. This was the weakest score since January 2010. Germany and the eurozone are gripped in a slowdown, and this has dampened business confidence.

The Federal Reserve continues to preach patience, as the minutes of the May meeting indicated that the Fed has no plans to change interest rates anytime soon. Although Fed members sounded more optimistic about economic growth, they remain committed to maintaining current rate levels, given that inflation remains low. Despite the Fed message, the markets expect at least one rate cut in 2019. The CME Group has priced in a 36% likelihood of a 25-point basis cut at the September meeting. The possibility of lower U.S. rates makes the greenback less attractive to investors and could boost the euro at the expense of the U.S. dollar.

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EUR/USD Fundamentals

Friday (May 24)

• Day 2 – European Parliamentary Elections
• 8:30 US Core Durable Goods Orders. Estimate 0.1%
• 8:30 US Durable Goods Orders. Estimate -2.0%
• 9:00 Belgian NBB Business Climate. Estimate -2.3

*All release times are DST

*Key events are in bold

EUR/USD for Friday, May 24, 2019

EUR/USD for May 24 at 6:25 DST

Open: 1.1182 High: 1.1206 Low: 1.1174 Close: 1.1193

EUR/USD Technical

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

• 1.1120 is providing support
• 1.1212 is under pressure in resistance
• Current range: 1.1120 to 1.1212

Further levels in both directions:

• Below: 1.1120, 1.1046 and 1.0950
• Above: 1.1212, 1.1300, 1.1434 and 1.1553

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