EUR/USD is steady in Thursday trading, with the pair trading just above the 1.36 line in what has been an uneventful week until now. In the Eurozone, today’s highlight is the ECB rate announcement. The French trade deficit widened, and we’ll get a look at German Industrial Production later in the day. In the US, ADP Non-Farm Payrolls climbed to a two-year high. The markets are expecting another strong Unemployment Claims release on Thursday.
Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.
EUR/USD Technical
- EUR/USD edged higher late in the Asian session, consolidating at 1.3601. The pair has edged higher in the European session.
Current range: 1.3525 to 1.3615.
Further levels in both directions: 
- Below: 1.3525, 1.3440, 1.34, 1.3320, 1.3240 and 1.3175.
- Above: 1.3615, 1.3675, 1.3710, 1.3800, 1.3832, 1.3940 and 1.4036.
- 1.3615 is a weak resistance line. 1.3675 follows.
- 1.3525 is providing strong support.
EUR/USD Fundamentals
- 7:45 French Trade Balance. Exp. -4.6B, actual -5.7B.
- Tentative – French 10-year Bond Auction.
- 11:00 German Industrial Production. Exp. 1.6%.
- 12:30 US Challenger Job Cuts.
- 12:45 ECB Minimum Bid Rate Cut. Exp. 0.25%.
- 13:30 ECB Press Conference.
- 13:30 US Unemployment Claims. Exp. 337K.
- 15:30 US Natural Gas Storage. Exp. -147B.
- 18:01 US 30-year Bond Auction.
*All times are GMT
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- ADP Non-Payrolls Jumps: December’s ADP Non-Farm Payrolls looked excellent. The key indicator climbed to 238 thousand, up from 215 thousand a month ago. This easily surpassed the estimate of 199 thousand. We’ll get a look at Unemployment Claims on Thursday, followed by the all-important Non-Farm Payrolls on Friday. With another QE taper in January a strong possibility, every employment release will be under the market microscope and could impact on the currency markets.
- Markets Await ECB Announcement: The ECB will announce its first rate statement of the year on Thursday. The central bank reduced rates in 2013 to spur inflation and increase growth, lowering the benchmark rate to a record low of 0.25%. However, inflation remains well below the 2% target, and Eurozone CPI remains weak, posting a gain of just 0.8% in December. Traders should be prepared for some movement from EUR/USD after the rate announcement and Mario Draghi’s follow-up press conference.
- Euro hits early January storm: The euro has not had much to cheer about in 2014, as the common currency has lost close to two cents in the past week. Surprisingly, the currency hasn’t received a boost from recent Eurozone data, which has generally looked sharp. German and Eurozone retail sales jumped in December, and German Unemployment Change sparkled with a sharp drop. As well, recent Spanish numbers have impressed. At the same time, Italy and France are struggling, and inflation and growth in the bloc remain subdued.
- German numbers sparkle: Germany started off 2014 with sharp numbers, as Retail Sales improved by 1.5%, reversing a downtrend of two straight declines. This beat the estimate of 0.5%. Unemployment Change was very sharp, declining by 15 thousand, the first decline in five months. On Wednesday, German Factory Orders jumped 2.1%, easily beating the estimate of 1.2%. Trade surplus widened to 17.8 billion euros, but this missed the estimate of 18.9 billion. The strong numbers we have seen in January are indicative of an improving German economy, which bodes well for the Eurozone.
- Dollar outlook for 2014: Many analysts see the dollar strengthening in 2014, but the euro is certainly expected to give a fight. Here is one outlook: 2014 – Conditional Dollar Strength.
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