EUR/USD is trading lower as the week draws to an end, as geo-political issues push German business confidence lower. The euro seems to ignore some monetary relief recorded in the zone. It is now trading below the pivotal 1.3450 line. Later in the day, we have important data from the US.
Here is a quick update on what’s moving the pair.
- EUR/USD traded steadily during the Asian session, keeping a safe distance from 1.3450, before dipping below this line.
- Current range: 1.3450 to 1.35.
Further levels in both directions:
- Below: 1.3450, 1.34, 1.3375 and 1.33.
- Above: 1.35, 1.3550, 1.3585, 1.3610, 1.3650 and 1.3677.
- On the downside, 1.3450 is under strong pressure. 1.34 is next.
- The round number of 1.35 remains an immediate resistance line. 1.3550 follows.
EUR/USD Fundamentals
- 6:00 German GFK Consumer Climate. Exp. 8.9 points, actual 9.
- 8:00 German IFO business climate. Exp. 109.6, actual 108 points.
- 8:00 Euro-zone M3 Money Supply. Exp. +1.1%, actual +1.5%.
- 8:00 Euro-zone Private Loans. Exp. -1.8%, actual -1.7%.
- 12:30 US durable goods orders. Exp. +0.4%, core exp. +0.6%.
- 13:00 Belgian NBB Business Climate.
*All times are GMT.
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- Mixed German data: The weak business confidence data from IFO contradicts the upbeat purchasing managers’ indices coming from the euro-zone’s powerhouse. In general, it seems that Germany cannot carry the euro-zone on its own. And while France’s services sector is back into growth territory, there are still worries about Europe’s second largest economy.
- US data: improving jobs have the upper hand: Weekly jobless claims dropped to an 8 year low at 284K. While this season is known for its volatility, the figure certainly had a positive impact on markets. Terrible new home sales had a smaller impact. We will get another hint for Q2 GDP from the release of durable goods orders.
- Geo-politics is not going anywhere: The tensions about the downing of MH17 are rising, as the EU prepares tough sanctions against Russia. These could be met with counter-sanctions and weigh on the EZ recovery. The war in Gaza intensifies with more casualties on both sides and little hope of an immediate ceasefire. Riots have also spread to the West Bank.
- Markets gearing for an important week: A triplet of an FOMC decision, US GDP and the Non-Farm Payrolls. Volatility is already on the rise, and is set to further advance next week.
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