EUR/USD Oct. 6 – Climbing up from 1.25 despite weak

EUR/USD  is lifting itself from the low ground of 1.25, a level it flirted with on Friday after the excellent US Non-Farm Payrolls report. In its rise, the  pair ignored a disappointing German  figure.  The US dollar is sliding down across the board, and with no US figures scheduled today,  it all depends on the flows.

Here’s a quick update on technicals, fundamentals and sentiment moving the pair.

• Asian session: The pair could not hold above 1.27 and fell back down.
• Current range:  1.2660 to 1.27.

Further levels in both directions:

• Below:  1.25, 1.2445, 1.24 and 1.2360.
• Above: 1.2570, 1.2620, 1.2660, 1.27 and 1.2750.
• 1.2660 is strong resistance- where the now broken uptrend began.
• 1.25 is a very round number (USD/EUR 0.80) and proved its strength.

EUR/USD Fundamentals

• 6:00  German Factory Orders. Exp. -2.4%, actual 5.7%.
• 8:10 Euro-zone  Retail PMI. Actual, 44.8 points.
• 8:30 Euro-zone  Sentix Investor Confidence.. Exp. -11.8. Actual -13.7 points.

* All times are GMT.

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

EUR/USD Sentiment

• Strong NFP: The US gained 248K jobs and the unemployment rate fell to 5.9%. In addition, revisions to previous months sealed the doubts that the US job market was slowing down. Things look brighter and the US dollar rallied. EUR/USD touched 1.25 but couldn’t break lower.
• FOMC minutes  anticipated: The minutes from the latest meeting might be more  hawkish than the message we  hear from Chair Yellen, given  previous releases. This is the big event of the week, due on Wednesday.
• Draghi doesn’t rock the boat: Not only did the ECB refrain from action, but it also refrained from details. A timetable for the ABS was all we got, but with the absence of a size for the ABS and without a clear mention of QE, markets got the impression that Draghi is not ready to do more just yet and the euro reacted with a rise. However, not acting doesn’t mean resolving the  situation, and the euro’s gains faded. Draghi speaks later in the week.
• Rock bottom inflation: The ECB convenes as the level of  inflation in the euro-zone is at rock bottom levels in both CPI, 0.3% and core CPI, 0.7%. They have never been this low together. The big question remains: will  the  low value of the euro be eventually reflected in higher inflation or is the situation even more dire?

In our latest podcast, we  discuss the big events for October:

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