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The euro has been under pressure all week, and the currency continues to post modest losses against the dollar. EUR/USD  is trading around  the 1.37 line and has lost about one cent on the week.  In economic news, ADP  Non-Farm Payrolls was awful, dropping to a six-month low.  As well, the  Federal Reserve released a statement that it  would maintain QE at current levels, given economic conditions. On Thursday, the major US release is Unemployment Claims. In the Eurozone, German releases were a disappointment, as Retail Sales and Consumer Climate fell short of expectations.

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 lost ground late in the session, dipping below the 1.37 line.  The pair is trading close to 1.37 in the European session.
  • Current range: 1.3650 to 1.3710.

Further levels in both directions:   EUR USD Daily Forecast_Oct. 31st

  • Below: 1.3650, 1.3570, 1.3500, 1.3460, 1.3415, 1.3325 and 1.3240.
  • Above: 1.3710, 1.3800, 1.3870, 1.3940, 1.4036, 1.41 and 1.4250.
  • 1.3710 is fluid and is providing weak resistance.1.3800 is next.
  • 1.3650 is the next support line. It is followed by 1.3570.

EUR/USD Fundamentals

  • 7:00 German Retail Sales. Exp. 0.5%, Actual -0.4%.
  • 7:00 GfK German Consumer Climate. Exp. 7.3, Actual 7.0 points.
  • 7:00  German Import Prices. Exp. 0.2%, Actual 0.0%.
  • 7:45 French Consumer Spending. Exp. 0.2%, Actual -0.1%.
  • 9:00 Italian Monthly Unemployment Rate. Exp. 12.4%, Actual 12.5%.
  • 10:00 Eurozone CPI Flash Estimate. Exp. 1.1%.
  • 10:00  Eurozone Unemployment Rate. Exp. 12.0%.
  • 10:00 Italian Preliminary CPI. Exp. 0.4%.
  • 11:30 US Challenger Job Cuts.
  • 12:30 US Unemployment Claims. Exp. 341K.
  • 13:00 US Treasury Secretary Jack Lew Speaks.
  • 13:45 US Chicago PMI. Exp. 55.1M.
  • 14:30 US Natural Gas Storage. Exp. 35B.

* All times are GMT.

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

EUR/USD Sentiment

  • Fed keeps QE tap open: The Federal Reserve wrapped up a policy meeting on Wednesday, the first meeting since Congress hammered out an agreement on the debt ceiling and reopened the government. As expected, the Fed said that it would maintain QE at current levels of $85 billion each month. However, the policy statement was less dovish than expected, as the Fed said that the economy was expanding “at a moderate pace” and left the door open for tapering in December. However, most markets analysts  are of  the view  that short of a sharp improvement in US data, QE tapering will be on hold until early 2014.
  • ADP Non-Farm Payrolls Falter: US employment data has looked weak recently, and there was no relief from ADP Non-Farm Payrolls on Wednesday. The key indicator dropped from 166 to 130 thousand, well off the estimate of 151 thousand. This was the indicator’s worst showing six months and underscores that the labor market is struggling to create new jobs. We’ll get a look at the all-important Unemployment Claims later on Thursday. The markets are expecting an improvement from last week’s reading.
  • US numbers continue to struggle: US releases other than employment indicators are also pointing downwards. On Tuesday, PPI and Retail Sales both declined by 0.1%, missing the estimate of 0.2%. CB Consumer Confidence dropped sharply, from 79.7 to 71.2 points, a six-month low. This was well short of the estimate of 75.7 points. Core Retail Sales managed to match the forecast, rising to 0.4%. The mostly weak figures come on the heels of dismal housing numbers on Monday. If confidence in the US economy starts to weaken, we could see the US dollar, which is already under pressure from the major currencies, lose ground.
  • Weak German numbers point to slowdown: It’s been a week to forget for German releases. On Thursday, Retail Sales posted its third decline in four releases, and Consumer Climate and Import Prices both fell short of their estimates. Earlier this week, German Unemployment Change came in at 2 thousand in September, just above the estimate of 1 thousand. Although this is a decent reading, this is the indicator’s third consecutive increase, raising concerns that the German economy is slowing down. The jobless rate was unchanged at 6.9 percent. If the Eurozone is to remain out of recession, it can ill afford for Germany, the region’s number one economy, to slow down.