EUR/USD – Euro yawns as German, eurozone manufacturing PMIs close to estimate

EUR/USD is showing little movement in the Thursday session. Currently, the pair is trading at 1.1206, up 0.10% on the day. On the release front, it’s a busy day on both sides of the pond. German and eurozone manufacturing PMIs were within expectations, with readings of 44.4 and 47.9, respectively. German retail sales declined by 0.2%, better than the estimate of -0.5%. In the U.S., unemployment claims is expected to drop to 220 thousand. On Friday, the eurozone releases CPI Flash Estimate and the U.S. releases nonfarm payrolls and wage growth.

Eurozone manufacturing remains soft, and there were no surprises from German and eurozone manufacturing PMIs for April, which remain mired in negative territory. Still, the readings were higher than those for March. Weaker global demand and taken a heavy toll on exports from Germany and the eurozone, which has damaged the manufacturing sectors. German retail sales declined in March, as nervous consumers held tight to their purse strings.

The Federal Reserve maintained the benchmark rate, as expected. The rate statement noted that inflation pressures are muted and that the FOMC would remain patient regarding future rate movements. Jerome Powell reinforced this stance at a follow-up press conference, saying “we don’t see a strong case for moving in either direction”. The Fed is already on record as saying it does not expect to raise rates before 2020, and with inflation levels persistently below the Fed’s target of 2.0%, the Fed can afford to continue its wait-and-see stance.

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EUR/USD Fundamentals

Thursday (May 2)

• 2:00 German Retail Sales. Estimate -0.5%. Actual -0.2%
• 3:15 Spanish Manufacturing PMI. Estimate 51.2. Actual 51.8
• 3:45 Italian Manufacturing PMI. Estimate 47.8.  Actual 49.1
• 3:50 French Final Manufacturing PMI. Estimate 49.6. Actual 50.0
• 3:55 German Final Manufacturing PMI. Estimate 44.5. Actual 44.4
• 4:00 Eurozone Final Manufacturing PMI. Estimate 47.8. Actual 47.9
• 5:07 French 10-year Bond Auction. Actual 0.37/3.1
• 7:30 US Challenger Job Cuts. Actual 10.9%
• 8:30 US Preliminary Nonfarm Productivity. Estimate 0.9%
• 8:30 US Preliminary Unit Labor Costs. Estimate 2.4%
• 8:30 US Unemployment Claims. Estimate 220K
• 10:00 US Factory Orders. Estimate 1.0%
• 10:30 US Natural Gas Storage. Estimate 107B
• Tentative – Treasury Currency Report

Friday (May 3)

• 5:00 Eurozone CPI Flash Estimate. Estimate 1.6%
• 5:00 Eurozone Core CPI Flash Estimate. Estimate 1.0%
• 8:30 US Average Hourly Earnings. Estimate 0.3%
• 8:30 US Nonfarm Employment Change. Estimate 181K
• 8:30 US Unemployment Rate. Estimate 3.8%
• 10:00 US ISM Non-Manufacturing PMI. Estimate 57.2

*All release times are DST

*Key events are in bold

EUR/USD for Thursday, May 2, 2019

EUR/USD for May 2 at 8:20 DST

Open: 1.1195 High: 1.1219 Low: 1.1191 Close: 1.1206

EUR/USD Technical

EUR/USD posted small gains in the Asian session. The pair fell slightly in European trade but has recovered

• 1.1120 is providing support
• 1.1212 was tested in resistance earlier in the session. It is a weak 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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