EUR/USD -Steady Following Mixed US Data

EUR/USD continues to show little movement in Friday trading. The pair has been trading close to the 1.35 line throughout the week, and we are not seeing any change from the pair in Friday’s European session. On Thursday, US Unemployment Claims looked sharp but Pending Homes Sales slumped, posting its weakest reading in 2013. In Friday events, French Consumer Spending missed the estimate and ECB head Mario Draghi spoke in Milan. Today’s US highlight is Revised UoM Consumer Sentiment.

In the US, Thursday’s results were a mix. Unemployment Claims improved slightly last week, from 309 thousand to 305 thousand last week. This beat the estimate of 319 thousand. The news was nowhere as positive from in the US housing sector, as Pending Home Sales declined by 1.6%, well off the estimate of -0.9%. This was the sharpest gain we’ve seen from the housing indicator this year. Revised UoM Consumer Sentiment will wrap up the week. The markets are braced for a reading below the 80-point level, which has not happened since March. Will the indicator surprise the markets with a strong reading?

The markets were counting on a QE tapering in September, but this was not to be as the Federal Reserve didn’t make a move. The Fed was of the opinion that US economic data, particularly employment numbers, did not justify scaling down QE at this time. So with all the speculation about QE taper behind us, what can we expect from the Federal Reserve? After the FOMC Statement, Federal Reserve Bank of St. Louis President James Bullard shed some light on the dramatic move (or lack of) by the Federal Reserve. Bullard said the vote was close, but weaker US numbers led to a decision not to taper. He added that the Fed may go ahead with “small” reductions to QE at its next policy meeting in October.

EUR/USD for Friday, September 27, 2013

EUR/USD 1.3504 H: 1.3511 L: 1.3475

EUR/USD Technical

• EUR/USD is trading just above the 1.35 line in Friday trading. The pair has edged above 1.35 in the European session.
• The pair continues to face strong resistance at 1.3585. The next line of resistance is at 1.3649. This line has remained intact since February.
• On the downside, there is weak support at 1.3476 . This is followed by a support level at 1.3410.
• Current range: 1.3476 to 1.3585

Further levels in both directions:

• Below: 1.3476, 1.3410, 1.3300, 1.3162 and 1.3100
• Above: 1.3585, 1.3649, 1.3786, 1.3893 and 1.4000

OANDA’s Open Positions Ratio

EUR/USD ratio is not showing much movement in Friday trading. This is reflected in the current movement of the pair, which is trading quietly. The ratio continues to have a solid majority of short positions, indicative of a strong trader bias towards the US dollar reversing direction and moving to higher ground.

EUR/USD is trading slightly above the 1.35 line. We could see stronger movement from the pair, with the release of U0M Consumer Sentiment later today.

EUR/USD Fundamentals

• 1:15 US FOMC Member Esther George speaks at economic forum in Denver. George is considered hawkish in stance.
•  All Day – German Preliminary CPI. Estimate 0.0%.
• July Data – French Consumer Spending. Estimate 0.3%. Actual 0.4%.
• 6:45 French Consumer Spending. Estimate 0.1%. Actual -0.4%.
• 8:10 Eurozone Retail PMI. Estimate 48.6 points.
• 9:00 Italian 10-year Bond Auction. Actual 4.50%.
• 9:45 US FOMC Member Charles Evans speaks at a bank conference in Oslo, Norway. Evans is considered dovish in stance.
• 12:30 US Core PCE Price Index. Estimate 0.1%.
• 12:30 US FOMC Member Eric Rosengren speaks at a financial conference in New York. Rosengren is considered dovish in stance.
• 12:30 US Personal Spending. Estimate 0.3%.
• 12:30 US Personal Income. Estimate 0.5%.
• 13:55 Revised UoM Consumer Sentiment. Estimate 78.2 points.
• 13:55 Revised UoM Inflation Expectations.
• 14:55 US FOMC Member Charles Evans speaks at a bank conference in Oslo, Norway. Evans is considered dovish in stance.
• 18:00 US FOMC Member Dudley speaks at an event in Syracuse. Dudley is considered neutral in stance.

*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.