EUR/USD – Slight Losses as Euro GDPs Within Expectations

EUR/USD has posted slight losses on Friday, as the pair has fallen under the 1.08 level. In the European session, the pair is trading above at 1.0750. It’s a very busy day on the economic front, so we could see some volatility from the pair later in the day. In the Eurozone, German and French GDP reports both came in at 0.3%, matching expectations. Eurozone GDP also posted a gain of 0.3%, shy of the forecast of 0.4%. There are three key releases out of the US – Retail Sales, PPI and UoM Consumer Confidence.

ECB head Mario Draghi testified before an ECB monetary committee on Thursday, and his broad hint about further easing in December has put downward pressure on the euro. Draghi made note of weak inflation in the Eurozone and stated that the ECB would “reexamine the degree of monetary policy accommodation,” Does this mean that the ECB will increase stimulus in December? Even if the central bank doesn’t make a move next month, we’re likely to see the current easing program extended beyond September 2016. With the Federal Reserve contemplating a rate hike in December, monetary divergence has sharpened and will continue to weigh on the euro, which is struggling at low levels.

The recent Fed policy statement hinted at a December rate hike, and this has understandably fueled market speculation about a rate hike in December. At the same time, the Fed has been split over a rate hike for quite some time, and many members will be hesitant to vote in favor of raising rates unless they are confident that the US economy can withstand an interest rate hike. Employment numbers out of the US have certainly improved, with recent indicators such as the unemployment rate pointing to close to full employment in the US economy. Key US releases on Friday, led by Retail Sales, will be closely watched by the markets and the Fed, and the strength of these readings will play a significant role in the Fed’s decision-making process ahead of the critical December monetary policy meeting.

EUR/USD Fundamentals

Friday (Nov. 13)

• 6:30 French Preliminary GDP. Estimate 0.3%. Actual 0.3%
• 7:00 German Preliminary GDP. Estimate 0.3%. Actual 0.3%
• 7:45 French Preliminary Nonfarm Payrolls. Estimate 0.1%. Actual 0.1%
• 9:00 Italian Preliminary GDP. Estimate 0.2%. Actual 0.3%
• 10:00 Eurozone Flash GDP. Estimate 0.4%. Actual 0.3%
• 10:30 Eurozone Trade Balance. Estimate 19.4B
• 13:30 US Core Retail Sales. Estimate 0.4%
• 13:30 US PPI. Estimate 0.2%
• 13:30 US Retail Sales. Estimate 0.3%
• 13:30 US Core CPI. Estimate 0.1%
• 15:00 US Preliminary UoM Consumer Sentiment. Estimate 91.3 points
• 15:00 US Business Inventories. Estimate 0.1%
• 15:00 US Preliminary UoM Inflation Expectations
• 15:30 US Natural Gas Storage. Estimate 51B

*Key releases are highlighted in bold

*All release times are GMT

EUR/USD for Friday, November 13, 2015

EUR/USD November 13 at 9:35 GMT

EUR/USD 1.0756 H: 1.0809 L: 1.0750

EUR/USD Technical

• EUR/USD posted slight gains in the Asian session. This downward trend is continuing in the European session.
• 1.0847 is an immediate resistance line.
• On the downside, 1.0732 remains under strong pressure and could break during the day.
• Current range: 1.0732 to 1.0847

Further levels in both directions:

• Below: 1.0732, 1.0659 and 1.05
• Above: 1.0847, 1.0941, 1.1017 and 1.1105

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged, reflective of the lack of movement from the pair. The ratio is close to an evenly split between long and short positions. This indicates a lack of trader bias as to what direction the pair will take next.

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.