EUR/USD is stable on Thursday, as the pair continues to trade in the high-1.33 range in the European session. On the release front, Eurozone indicators were mixed. In Germany Retail Sales and Unemployment Change beat their estimates, while French Consumer Spending posted another strong gain. Eurozone CPI and Unemployment Rate met expectations. In the US, today’s highlight is Unemployment Claims. The markets are braced for a rise in claims.
Here is a quick update on what’s moving the pair.
- EUR/USD has shown little movement in the Asian and European sessions. The pair has reached the 1.34 resistance line but has been unable to break above this barrier.
- Current range: 1.3325 to 1.3400.
Further levels in both directions:
- Below: 1.3325, 1.3295 and 1.32.
- Above: 1.34, 1.3450, 1.35, 1.3550, 1.3585, 1.3610, 1.3650 and 1.3677.
- On the upside, 1.34, a critical line, is fluid. 1.3450 follows.
- 1.3325 is providing support.
EUR/USD Fundamentals
- 6:00 German Retail Sales. Estimate 1.1%, actual 1.3%.
- 6:45 French Consumer Spending. Estimate 0.3%, actual 0.9%.
- 7:55 German Unemployment Change. Estimate -5K, actual -12K.
- 8:00 Italian Monthly Unemployment Rate. Estimate 12.6%, actual 12.3%.
- 9:00 Eurozone CPI Flash Estimate. Estimate 0.5%, actual 0.4%.
- 9:00 Eurozone Core CPI Flash Estimate. Estimate 0.8%. actual 0.8%
- 9:00 Eurozone Unemployment Rate. Estimate 11.6%, actual 11.5%.
- 9:00 Italian Preliminary CPI. Estimate +0.1%, actual -0.1%.
- 11:30 US Challenger Job Cuts.
- 12:30 US Unemployment Claims. Estimate 303K.
- 12:30 US Employment Cost Index. Estimate 0.5%.
- 13:45 US Chicago PMI. Estimate 63.2 points.
- 14:30 US Natural Gas Storage. Estimate 92B.
*All times are GMT.
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- US economy surges in Q2: In the US, GDP soared in Q2, expanding at an annual rate of 4.0%. This easily beat the estimate of 3.1%. The boost in economic activity was boosted by strong consumer confidence and business activity in Q2. Meanwhile, ADP Nonfarm Payrolls was unable to keep pace. The key employment indicator dropped to 218 thousand, compared to 284 thousand a month earlier. This was well off the estimate of 234 thousand. If the official Nonfarm Payrolls follows suit with a weak reading on Friday, the US dollar could give up its recent gains.
- Germany up, Eurozone steady: Eurozone CPI, one of most important indicators, edged lower to 0.4%. Although this was close to the estimate of 0.5%, this figure was the lowest in almost five years, and raises concerns of deflation. There was better news from the Eurozone Unemployment Rate, which dipped to 11.4%, its lowest level since September 2012. German data was positive, led by Retail Sales which jumped 1.3%, beating the estimate of 1.1%. German Unemployment Change posted a decline of 12,000, easily surpassing the estimate of a drop of 5,000.
- Spanish data improves: Most Western countries would be loathe to brag about 25% unemployment, but the Spanish unemployment rate of 24.5% in Q2 was its lowest level in two years, beating the estimate of 25.9%. There was more good news on Tuesday, as Spanish GDP posted a healthy gain of 0.6%, edging above the estimate of 0.5%. The Bank of Spain has raised its economic forecast for 2014 and 2015, acknowledging a stronger Spanish economy.
- US consumer confidence soars: CB Consumer Confidence was outstanding on Tuesday, pointing to a sharp increase in June. The key indicator jumped to 90.9 points, crushing the estimate of 85.5 points. This was the indicator’s highest level since September 2007. Consumer confidence is closely tracked by analysts since a confident consumer is likely to increase consumption, which is critical for economic growth.
More: EURUSD: Vulnerable, Targets Further Downside With Caution
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