EUR/USD – Euro Struggling to Stay Above 119

EUR/USD remains under pressure at the start of the trading week, as the pair trades at the 119 line in Monday’s European session. On the release front, today’s highlight is German CPI, which will be released later in the day. Elsewhere, Spanish Unemployment Change posted a strong reading of -64.4 thousand. Eurozone Sentix Investor Confidence improved to 0.9 points. In the US, it’s a light schedule, with one minor release, Total Vehicle Sales. As well, FOMC Member John Williams will speak at an event in Boston.

The euro greeted the new year by dipping below the psychologically important 1.20 line, and is currently trading at the 119 level. This marks the pair’s lowest level since June 2010.  The harsh economic reality engulfing the Eurozone means that ECB head Mario Draghi may be forced to use his trump card of quantitative easing early in 2015. This step would further weaken the wobbly euro, so the euro’s woes are likely to continue.

On Friday, US ISM Manufacturing PMI disappointed, falling to 55.5 points. This missed the forecast of 57.6 points and marked a 6-month low for the index. Still, market sentiment remains positive regarding the US economy, and the US dollar continues to look sharp against its major rivals. We’ll get a look at the ISM Non-manufacturing PMI on Tuesday. The markets are expecting a softer reading in the December release.

EUR/USD for Monday, January 5, 2015

EUR/USD for Monday, January 5, 2015 at 11:55 GMT

EUR/USD 119.02 H: 1.1976 L: 1.1914

EUR/USD Technical

• EUR/USD was flat in the Asian session. The pair has lost ground in the European session, breaking below support at 1.1926.
• 1.1802 is providing strong support.
• 1.1926 is a weak resistance line. 1.2042 is stronger.
• Current range: 1.1802 to 1.1926

Further levels in both directions:

• Below: 118.02, 1.1736, 1.1638 and 1.1525
• Above: 1.1926, 1.2042, 1.2143, 1.2286 and 1.2407

OANDA’s Open Positions Ratio

EUR/USD is pointing to gains in short positions on Monday. This is consistent with the pair’s movement, as the euro has posted losses. The ratio has a majority of long positions, indicative of trader bias towards the euro reversing direction and moving to higher ground.

EUR/USD Fundamentals

• All Day – German Preliminary CPI. Estimate 0.1%.
• 8:00 Spanish Unemployment Change. Estimate -64.4K. Actual -72.0K.
• 9:30 Eurozone Sentix Investor Confidence. Estimate -0.9 points. +0.9 points.
• 13:00 US FOMC Member John Williams Speaks.
• All Day – US Total Vehicle Sales. Estimate 16.9M.

*Key releases are highlighted in bold

*All release times are GMT

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