EUR/USD has edged higher as we start the new trading week. The pair is trading in the low-1.35 range in Monday’s European session. On Friday, the US wrapped up a disappointing week with Empire State Manufacturing Index, which slumped to a ten-month low. Eurozone releases started the week on a sour note, as Current Account posted its smallest surplus in almost a year. There are no major US releases on Monday.
Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.
EUR/USD Technical
- In the Asian session, EUR/USD edged higher and crossed above the 1.35 line late in the session. The pair is steady in the European session.
- Current range: 1.3500 to 1.3570.
Further levels in both directions: 
- Below: 1.3500, 1.3440, 1.3400, 1.3320, 1.3240, 1.3175, 1.31, 1.3050, 1.3000, 1.2940, 1.2890 and 1.2840.
- Above: 1.3570, 1.3650, 1.3710, 1.3800 and 1.3870
- On the downside, 1.3500 is providing weak support. 1.3440 is next.
- 1.3570 is the next line of resistance. 1.3650 follows.
EUR/USD Fundamentals
- 6:00 FOMC Member Eric Rosengren Speaks.
- 9:00 Eurozone Current Account. Exp. 18.3B. Actual 13.7B.
- 10:00 Eurozone Trade Balance. Exp. 14.3B.
- 14:00 US TIC Long-Term Purchases. Exp. 21.3B.
- 15:00 US NAHB Housing Market Index. Exp. 56 points.
- 17:15 FOMC Member William Dudley Speaks.
*All times are GMT
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- Current account falters: Eurozone Current Account looked awful in October, as the surplus dropped to 13.7 billion euros, compared to 17.4 billion the month before. This was way off the estimate of 18.3 billion. Current Account is closely linked to currency demand, with a smaller surplus indicative of decreased purchases of euros by foreigners for Eurozone goods and services. So, the weak reading in October could have a negative impact on the euro.
- Unemployment claims miss mark: Unemployment Claims have been fairly steady over the past few weeks, but with speculation increasing about a possible December taper by the Federal Reserve, every employment release is under the market’s microscope. The indicator showed little change with a reading of 339 thousand, but this was above the estimate of 331 thousand. There wasn’t any relief from Thursday’s other key release, Trade Balance. The October deficit widened to -$41.8 billion, compared to -$38.8 billion in September. This was well above the estimate of -$38.7 billion.
- More of the same from Yellen?: Incoming Federal Reserve head Janet Yellen testified before the powerful Senate Banking Committee on Thursday. Yellen is a strong supporter of QE, and told the committee that the present level of asset purchases should continue until growth improves and unemployment falls. She said that the labor market and economy are performing “far short of their potential”, but added that she expects inflation to remain below the Fed’s target of 2%. Yellen, who will become the first woman to head the Federal Reserve, takes over from Bernard Bernanke in January.
- Eurozone GDP releases disappoint: Last week’s Eurozone GDP releases point to continuing weak growth in the region. Eurozone Flash GDP gained just 0.1%, shy of the estimate of 0.2%. French and Italian Preliminary GDP both declined by 0.1%, missing their estimates. German Preliminary GDP matched the forecast of 0.3%, but this figure was sharply lower than the September reading, which posted a gain of 0.7%. The ECB recently lowered interest rates in an attempt to improve economic growth, and we’ll have to wait and see if next month’s GDP numbers respond positively to the rate cut.
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