EUR/USD has dipped below the 1.36 line on Tuesday. The euro is under pressure as German and Eurozone ZEW Economic Sentiment both weakened in June and missed their estimates. In the US, today’s highlights are Core Retail Sales and Retail Sales. As well, Federal Reserve chair Janet Yellen will begin two days of testimony on Capitol Hill.
Here is a quick update on what’s moving the pair.
- EUR/USD was steady in Asian trading. The pair broke below support at 1.3610 in the European session.
- Current range: 1.3585 to 1.3610.
Further levels in both directions: 
- Below: 1.3585, 1.3550, 1.35, 1.3450, and 1.34.
- Above: 1.3610, 1.3650, 1.3677, 1.37 and 1.3740.
- On the downside, 1.3585 is under strong pressure. 1.3550 is next.
- 1.3610 has reverted to a resistance role. 1.3650 follows.
EUR/USD Fundamentals
- 9:00 German ZEW Economic Sentiment. Estimate 28.9 points. Actual 27.1 points.
- 9:00 European ZEW Economic Sentiment. Estimate 62.3 points. Actual 48.1 points.
- 12:30 US Core Retail Sales. Estimate 0.5%.
- 12:30 US Retail Sales. Estimate 0.6%.
- 12:30 US Empire State Manufacturing Index. Estimate 17.2 points.
- 12:30 US Import Prices. Estimate 0.5%.
- 14:00 Federal Reserve Chair Janet Yellen Testifies Before Senate Banking Committee.
- 14:00 US Business Inventories. Estimate 0.6%.
*All times are GMT.
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- German, Eurozone numbers are worrying: More German economic data, more bad news. This seems to be the latest theme from the largest economy in the Eurozone, which continues to post weak data, as underscored in last week’s manufacturing and inflation numbers. On Tuesday, German ZEW Economic Sentiment, a highly regarded report, slipped to 27.1 points, short of the estimate of 28.9 points. The indicator has been fallen steadily since last November, when it was above the 60-point level. The July figure is the weakest we’ve seen since November 2012. The Eurozone release brought no relief, as it plunged to 48.1 points, down from 58.4 a month earlier. The estimate stood at 62.3 points. These weak numbers will raise concerns about the health of the German and Eurozone economies, and the euro could lose ground.
- A Draghi drag? The president of the ECB maintained a dovish tone in his most recent press conference. With the next meeting not until early August, Draghi is free to release comments in his testimony in front of the European parliament. He will be asked about the AQR, TLTRO and other topics, but what interests the markets are his intentions about Euro-zone QE, something that can weigh on the euro.
- Will Yellen acknowledge the recovery?: The Federal Reserve minutes did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. In addition, James Bullard had his “Carney moment” saying that rates could rise sooner than investors think. Together with an influential article in the WSJ, it seems that the Fed is getting closer to acknowledging the improvement in the US economy. The markets will be closely following Yellen’s remarks before the Senate Banking Committee on Tuesday, looking for clues regarding the timing of a rate hike.
- Concerns over Portugal: A major shareholder of a Portuguese bank missed a bond payment. This was a stark reminder that the underlying problems in Europe are far from being resolved. Stock markets fell and the euro also felt the heat, albeit in a limited manner.
- US job numbers keep rolling: US employment numbers continue to improve. On Tuesday, JOLTS Job Openings jumped to 4.64 million, easily beating the estimate of 4.53 million. This follows excellent figures from Nonfarm Payrolls and Unemployment Rate. The jobless claims also dropped to 304K, at the bottom of the range.
Share
