EUR/USD – Euro takes pause from slide in thin holiday trade

EUR/USD has declined for a third straight day on Thursday. Currently, the pair is trading at 1.1142, down 0.10% on the day. German banks are closed for Ascension Day, and there are no eurozone or German events. It’s a busy day in the U.S., highlighted by second estimate GDP, with an estimate of 3.1%. Unemployment claims is expected to rise to 216 thousand. On Friday, Germany and the U.S. both release inflation and consumer spending data.

The slowdown which has gripped the eurozone has also dampened growth in Germany, but the labor market has performed well and remained a bright spot. However, there was negative news in April, as unemployment rolls ballooned by 60 thousand in May, surprising the markets. The indicator has recorded consecutive declines for almost two years, and the estimate stood at -8 thousand. The unemployment rate edged up to 5.0% in May, up from 4.9% in April. The Federal Labor Agency said that the weak numbers indicate “a weakening economy on unemployment”. Trade tensions have hurt the German manufacturing and export sectors, but a tight labor market has boosted consumer spending, a key driver of economic growth.

It’s report card day for the U.S. economy, which releases Preliminary GDP. This second estimate of Q1 growth is expected to be revised downwards to 3.1%. This reading was just below the initial release of 3.2%, which easily surpassed the forecast of 2.2%. If the second estimate follows suit and beat expectations, the euro could head lower and flirt with the 1.11 level.

Equities lose their bonding

Economic terrorism has equities and bond yields under pressure

EUR/USD Fundamentals

Thursday (May 30)

• 3:00 Spanish Flash CPI. Estimate 1.2%. Actual 0.8%
• 5:25 Italian 10-year Bond Auction. Actual 2.60/1.3
• 8:30 US Preliminary GDP. Estimate 3.1%
• 8:30 US Goods Trade Balance. Estimate -72.0B
• 8:30 US Preliminary GDP Price Index. Estimate 0.9%
• 8:30 US Preliminary Wholesale Inventories. Estimate 0.2%
• 8:30 US Unemployment Claims. Estimate 216K
• 10:00 US Pending Home Sales. Estimate 0.9%
• 10:30 US Natural Gas Storage. Estimate 98B
• 11:00 US Crude Oil Inventories. Estimate -0.9M
• 12:00 US FOMC Member Clarida Speaks

Friday (May 31)

• 2:00 German Retail Sales. Estimate 0.4%
• 2:00 German Preliminary CPI. Estimate 0.3%
• 8:30 US Core PCE Price Index. Estimate 0.2%
• 8:30 US Personal Spending. Estimate 0.2%
• 9:45 US Chicago PMI. Estimate 55.1
• 10:00 US Revised UoM Consumer Sentiment. Estimate 102.0

*All release times are DST

*Key events are in bold

EUR/USD for Thursday, May 30, 2019

EUR/USD for May 30 at 6:40 DST

Open: 1.1131 High: 1.1143 Low: 1.1124 Close: 1.1145

EUR/USD Technical

EUR/USD showed little movement in the Asian session. In European trade, the pair posted small losses but has recovered

• 1.1120 is under pressure in support
• 1.1212 is the next resistance line
• 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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