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EUR/USD  is rangebound in Friday trading, as the pair takes a breather after sharp gains on Thursday. In today’s European session, the pair is trading in the high-1.32 range. On Thursday, German Ifo Business Climate  looked solid as  it  matched the forecast.  Spanish Unemployment was a pleasant surprise, beating the forecast. The news was not as good out of the US, as both key indicators fell short of their estimates. Core Durable Goods Orders dropped to a three-month low, while Unemployment Claims rose and came in above expectations.  Taking a look at Friday’s releases, German Import Prices posted its fourth consecutive decline.  Friday’s highlight is the US  UoM Consumer Sentiment.

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

  • Asian session: Euro/dollar  was  quiet, touching a high of 1.3289.  The pair consolidated at 1.3280. In the European session, the pair is unchanged.

Current range: 1.3255 to 1.3350.

Further levels in both directions:

  • Below: 1.3255, 1.3175, 1.31, 1.3050, 1.30, 1.2940, 1.2890 and 1.2840.
  • Above:    1.3350, 1.34, 1.3649 and 1.3797.
  • 1.3350 is the next resistance line. This is followed by the round number of 1.34.
  • 1.3255 is providing weak support. 1.3175 is stronger.

EUR/USD Fundamentals

  • 6:00  German Import Prices,  exp. 0.4%, actual -0.8%.
  • 13:55 Revised UoM Consumer Sentiment, exp. 84.0 points.
  • 13:55 Revised UoM Inflation Expectations.

For more events and lines, see the  Euro to dollar forecast.

EUR/USD Sentiment

  • Euro jumps after weak US numbers:  The euro gained close to a cent on Thursday,  after key  US releases  faltered.  Unemployment Claims was a disappointment, rising from 334 thousand to 343 thousand. The estimate stood at 339 thousand. Core Durable Goods Orders, another major release,  slid badly, dropping from 0.7% to a flat 0.0%. The markets were expecting a gain for the third consecutive month, with an estimate of 0.5%. There was some relief from Durable Goods Orders, a second tier release.  The manufacturing indicator climbed  from 3.6% to 4.2%, blowing past the estimate of 1.1%.
  • US new home sales soar: The week started off an a disappointing note as existing home sales disappointed with a drop to 5.08 million, and this pushed the dollar lower across the board. However,  New Home Sales more than made up for this weak release, jumping from 476 thousand to 496 thousand, well above the estimate of 482 thousand. This was  the key housing indicator’s  best performance in five years. With mixed housing releases this week,  we’ll have to wait for data in August  to get a better handle on  the  direction  of the US housing sector.
  • Eurozone PMIs point higher: There was good news out of the Eurozone early in the week, as European PMIs looked strong. Eurozone, German and French Services and Manufacturing PMIs all beat their estimates,  pointing to improvement in the services and manufacturing sectors. The markets were especially pleased with the German data, as both PMIs came in above the 50 level, which is the separator between expansion and contraction.    Despite showing improvement, both French PMIs still remain below 50, which has been the case throughout 2013. Eurozone PMIs were a mix, with the Manufacturing PMI climbing to 50.1 points, while Services PMI  moves closer to expansion, rising to 49.6 points. If additional services and manufacturing indicators out of the Eurozone follow pace and point upwards, the euro could continue to post gains against the dollar.
  • Spanish unemployment rate drops:  An unemployment rate of over 26% is not news to celebrate, but it was a ray of good news for Spain, which saw its staggering unemployment rate drop from 27.2% to 26.3%. This marked the first monthly drop since July 2011, when the unemployment rate was around 21%. We have seen some positive data out of Spain recently, leading Spain’s finance minister de Guindos to declare that Spain’s economy is improving “beyond seasonal effects”. The markets are hoping that the finance minister is right and that economic releases continue to point upwards after the summer.
  • Recent technical analysis articles:  EUR/USD set to extend gains