EUR/USD March 6 – Quiet As Markets Await ECB Decision,

EUR/USD  is not showing much movement on Thursday, as the pair trades in the low-1.37 range. We  could  see some movement from the pair  during the day, as the ECB  issues  its interest rate decision and the US releases Unemployment Claims.  We’ll also get a look at German Factory Orders later in the day. On Wednesday, ADP Non-Farm Payrolls fell way short of the estimate for a second straight month, as  US employment numbers continue to struggle.  

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

EUR/USD Technical

• EUR/USD showed little activity in the Asian session and closed at 1.3728. The pair  is unchanged in the European session.

Current range: 1.37 to 1.3773.

Further levels in both directions:  

• Below: 1.37, 1.3650, 1.3580, 1.3515, 1.3450 and 1.34
• Above: 1.3773, 1.3830, 1.3895, 13915,  1.40 and 1.4214.
• 1.3773  continues to  provide  resistance.
• On the downside, 1.37 is a weak line. 1.3650 is next.

EUR/USD Fundamentals

• 00:00 US FOMC Member  Richard Fisher Speaks.
• 9:10  Eurozone Retail  PMI. Actual 48.5 points.
• 9:45 Spanish 10-year Bond Auction. Actual  3.34%.
• 10:00 French 10-year Bond Auction. Actual 2.20%.
• 11:00  German Factory Orders. Exp. 1.1%.
• 12:30 US Challenger Job Cuts.
• 12:45 ECB Minimum Bid Rate. Exp. 025%, Actual 0.25%.
• 13:15  US FOMC Member William Dudley Speaks.
• 13:30 ECB Press Conference.
• 13:30 US Unemployment Claims. Exp. 336K.
• 13:30 US Revised Nonfarm Productivity. Exp. 2.6%.
• 13:30 US Revised Unit Labor Costs. Exp. -1.0%.
• 15:00 US Factory Orders. Exp. -0.4%.
• 15:30 US Natural Gas   Storage. Exp. -134B.
• 18:00 US FOMC Member  Charles  Plosser Speaks.

*All times are GMT

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

EUR/USD Sentiment

• Will ECB make a move?:  The ECB  didn’t take any action last month and  kept the benchmark  interest rate  at 0.25%.  The rate is not expected to change, but  the ECB  does have some  other options available, such as a negative interest  rate or a mini-QE. ECB  head Mario Draghi will  hold a press conference after the rate decision, and the markets will be listening closely. Here  are 4 scenarios of what  moves we could see from the ECB.  
• ADP Nonfarm Payrolls,  Services PMI  miss expectations: In the US, it’s looking  like another nasty streak of weak  releases.  ADP Non-Farm Employment Change posted another sharp drop in February, coming in at 139 thousand, down from 175 thousand a month earlier. The  weak reading was well off the estimate  of 159 thousand. With Unemployment Claims and the official Nonfarm Payrolls still to come, the dollar could take a hit if these releases fail to meet expectations. Meanwhile, the news was not much better from the services sector. ISM Non-Manufacturing PMI dropped to 51.6 points, down sharply from 54.0 a month ago. This was well below the estimate of 53.8, and the index’s lowest level since August 2010.
• Eurozone  data a mix:  There was good news from Eurozone Retail Sales, as the key consumer spending indicator jumped 1.6%, easily beating the estimate of 0.9%. Eurozone Services PMIs painted a mixed picture of the services sector. Spain’s numbers dropped to 53.7 in February, well below the estimate of 55.3. There was better news from Italian Services PMI, which  pushed above the 50-point line for the first time since September. The  index  rose to 52.9 points, beating the estimate of 50.6.  Eurozone Final Services PMI climbed to 52.6 points, above the estimate of 51.7. With recent Eurozone numbers looking respectable, ECB head Mario Draghi may opt to hold the course and not make any monetary moves this week.
• Ukraine drama continues: All eyes remain on the Ukraine, as Russia has effectively taken over Crimea following the ousting of the  Ukrainian president, who  has fled to Russia. The US and Russia continue  to talk tough  and this  has caused plenty of nervousness and movement in  global markets.  If the tension continues and turns into a full scale war and/or a division of the Ukraine, the outstanding debt  may never be repaid and Europe could suffer a blow. In the meantime, the big winner is the Swiss franc.

More:  Euro-zone inflation: a look to February 2013 can explain the surprise