EUR/USD: Euro Edges Lower, U.S. Markets Closed For Holiday

EUR/USD has edged lower on Monday, as the pair trades at 1.1170. US markets are closed for Columbus Day, so there are no US releases to start off the week. In Europe, there are no major events on the schedule. Germany’s trade surplus jumped to EUR 22.2 billion, ahead of the forecast of EUR 19.3 billion. Eurozone Sentix Investor Confidence jumped to 8.5 points, beating the forecast of 6.2 points. On Tuesday, we’ll get a look at ZEW Economic Sentiment reports out of the Eurozone and Germany, with both indicators expected to improve in the October release.

Eurozone numbers started off the week on a positive note. German trade balance and the Eurozone Sentix Investor Confidence both recorded strong gains, and Italian Industrial Production was unexpectedly strong at 1.7%, marking its strongest gain in seven months. With the ZEW Economic Sentiment expected to show strong numbers, the euro could take advantage and post gains.

US employment numbers for September were mixed on Friday. Nonfarm payrolls, one of the most closely watched indicators, rose slightly to 156 thousand. Although this was well short of the forecast of 171 thousand, the markets do not appear overly concerned, as other employment indicators were steady. Average Hourly Wages edged up to 0.2%, matching the forecast. The unemployment edged up to 5.0%, just above the forecast of 4.9%.

As well, the labor force participation rate ticked higher. Unemployment claims sparkled last week, dropping to just 249 thousand, beating the estimate of 255 thousand. Unemployment claims have come in below the forecast for 10 straight weeks, pointing to a tight labor market. Jobless filings have been below 300,000 for 83 straight weeks, marking the longest streak since 1970. Overall, September employment numbers were decent and the likelihood of December rate has actually risen slightly since Friday, from 63 percent to 66 percent.

EUR/USD Fundamentals

Monday (October 10)

  • 6:00 German Trade Balance. Estimate 19.3B. Actual 22.2B
  • 8:00 Italian Industrial Production. Estimate -0.2%. Actual +1.7%
  • 8:30 Eurozone Sentix Investor Confidence. Estimate 6.2. Actual 8.5

*All release times are EDT

* Key events are in bold

EUR/USD for Monday, October 10, 2016

EUR/USD Oct 9 – 11 Chart

EUR/USD October 10 at 10:40 GMT

Open: 1.1194 High: 1.1200 Low: 1.1164 Close: 1.1169

EUR/USD Technical

  • EUR/USD posted small losses in the Asian and European sessions
  • There is strong resistance at 1.1278
  • 1.1150 is a weak support line

Further levels in both directions:

  • Below: 1.1150, 1.1054, 1.0957 and 1.0821
  • Above: 1.1278, 1.1376 and 1.1467
  • Current range: 1.1150 to 1.1278

OANDA’s Open Positions Ratio

EUR/USD ratio continues to show movement towards short positions. Currently, short positions have a majority (56%), indicative of trader bias towards EUR/USD continuing to move to lower ground.

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