EUR/USD – Euro Gains on Weak US Numbers

The euro has posted gains on Friday, continuing the trend we saw a day earlier. In the European session, the pair is trading in the high-1.35 range. In the US, Thursday’s key releases were less than impressive, as retail sales numbers were soft and Unemployment Claims rose. On the release front, there are two major events out of the US – Producer Price Index and UoM Consumer Sentiment. The markets are expecting another strong reading in May. In the Eurozone, inflation remains sluggish, as German Final CPI posted a second straight decline.

Thursday’s key US events were a major disappointment, as retail sales and employment numbers were weak. Retail Sales came in at 0.3%, short of the estimate of 0.5%. Core Retail Sales could only muster a gain of 0.1%, shy of the forecast of 0.4%. Unemployment Claims, one of the most important economic indicators, rose to 317 thousand, missing market expectations of 306 thousand. After losing over 100 points early in the week, the euro has reversed directions, taking advantage of the soft US numbers.

After months of hesitation, the ECB cut interest rates to record lows last week in an attempt to boost flagging growth and inflation levels. Industrial Production was a pleasant surprise, rising 0.8% in May, its best showing in 2014. This easily beat the estimate of 0.5%. However, the news was not reassuring on the inflation front, as data from Germany and France, the region’s two largest economies, remains listless. German WPI came in at -0.1%, short of the estimate of +0.3%. German Final CPI came in at -0.1%, its second straight decline. French CPI recorded a flat reading of 0.0% for the second consecutive month. If growth and inflation numbers in the Eurozone continue to struggle, the ECB will be under pressure to take stronger action at next month’s policy meeting.

EUR/USD for Friday, June 13, 2014

EUR/USD June 13 at 8:45 GMT

EUR/USD 1.3575 H: 1.3579 L: 1.3550

EUR/USD Technical

• EUR/USD has posted slight gains on Friday.
• 1.3487 is providing support. 1.3346 is stronger.
• 1.3585 is under strong pressure. Will the pair break through this barrier? There is stronger resistance at 1.3649.
• Current range: 1.3487 to 1.3585

Further levels in both directions:

• Below: 1.3487, 1.3346, 1.3219 and 1.3102
• Above: 1.3585, 1.3649, 1.3786, 1.3893 and 1.4000

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in short positions on Friday. This is not consistent with the movement of the pair, as the euro has edged higher. The ratio has a majority of long positions, indicative of trader bias towards the euro continuing to improve against the dollar.

EUR/USD has posted modest gains on Friday. The pair is unchanged in the European session.

EUR/USD Fundamentals

• 5:30 French Final Non-Farm Payrolls. Estimate- 0.1%. Actual -0.1%.
• 6:00 German Final CPI. Estimate -0.1%. Actual -0.1%.
• 9:00 Eurozone Employment Change. Estimate 0.1%.
• 9:00 Eurozone Trade Balance. Estimate 15.9B.
• 12:30 US PPI. Estimate 0.1%.
• 12:30 US Core PPI. Estimate 0.2%.
• 13:55 US Preliminary UoM Consumer Sentiment. Estimate 83.2 points.
• 13:55 US Preliminary UoM Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

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.