EUR/USD Oct. 9 – Breaking higher on FOMC meeting minutes

EUR/USD  broke higher after the somewhat dovish FOMC meeting minutes and is now looking to even higher levels above 1.2750. The Fed expressed worries about global growth and the strong dollar, and the dollar certainly responded. The euro also ignores yet another disappointing German figure.

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

• Asian session: The pair held onto high ground above 1.27 and later attempted to break above 1.2750..
• Current range:  1.2750 to 1.28

Further levels in both directions:

• Below:  1.2750, 1.27, 1.2660, 1.26, 1.2570 and 1.25.
• Above:  1.28, 1.2860, 1.2920 and 1.30.
• The break above 1.2750 is still not confirmed.
• 1.2660 turns into support.

EUR/USD Fundamentals

• 6:00 German trade balance. Exp. 18.4 billion, actual 17.5.
• 6:45 French trade balance. Exp. -5.7 billion, actual -5.8 billion.
• 8:00 ECB Monthly Bulletin.
• 12:30 US jobless claims. Exp. 291K. See how to trade the unemployment claims with EUR/USD.
• 14:00 US  Wholesale Inventories. Exp. +0.3%.
• 15:00 ECB president Mario Draghi talks.  
• 17:10 US FOMC member  Daniel Tarullo talks.
• 17:30 US FOMC member Stanley Fischer talks.

* All times are GMT.

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

EUR/USD Sentiment

• Dovish FOMC minutes: The meeting minutes from the latest FOMC meeting showed that the Fed is worried about global growth and also about the strength of the dollar, that could both hurt exports and trigger disinflationary pressures. The dollar fell across the board.
• Strong US data: The JOLTS figure was the best since 2001 and also the Non-Farm Payrolls were quite good. This seems to be forgotten now as the dollar bears regained control after a very long time. We have another job figure today. See how to trade the jobless claims with EUR/USD.
• German weakness:  Both German factory orders and industrial output fell sharply in August. While there is some seasonality here, this “hard data” contrary to the “soft data” coming from PMIs, is certainly worrying. The miss the trade balance adds to the mix.
• Draghi talks: A week passed since the president of the ECB was not too dovish and allowed the euro to temporarily recover. With more weakness in Germany and a stronger euro, will Draghi make warnings or continue his previous stance? His second in line, Vitor Constancio laid out some details about the Bank’s trillion euro plan.

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

Download it directly here.

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