EUR/USD: Euro Unchanged Ahead Of US Durable Goods, Jobless Claims

EUR/USD is unchanged in the Thursday session, as the pair trades slightly above the 1.09 line. On the release front, there are no major Eurozone releases on the schedule. In the US, there are two key releases – core durable goods orders and unemployment claims. On Friday, Germany will publish Preliminary CPI. The US will release Preliminary GDP, with an estimate of 2.5%. We’ll also get a look at UofM Consumer Sentiment.

As the largest economy in the Eurozone, Germany’s economic indicators are closely watched, as they are considered a bellwether of economic activity in the Eurozone economy. In October, German consumer confidence was lower than expected. GfK Consumer Climate dipped below the symbolic ten-point mark for the first time since May. Business confidence took the opposite direction, as German Ifo Business Climate rose to 110.5 points in October, improving for a second straight month.

Earlier in the month, the well-respected ZEW German economic sentiment surveys for Germany also pointed upwards. The German economy has shown signs of improvement, prompting the government to upgrade its growth forecast from 1.7 percent to 1.8 percent for 2016. At the same time, inflation levels remain low and German Preliminary CPI is expected to remain unchanged at a negligible 0.1%.

The markets remain confident that the Fed will press the rate trigger in December, with a hike priced in at 72 percent by CME Fed Watch. The prospect of a US rate hike for the first time in a year, has bolstered the US dollar against its rivals, including the euro. EUR/USD is down 2.8 percent in October, as the euro struggles to remain above the 1.09 line.

The US economy remains strong, buoyed by a labor market that is close to capacity, with unemployment at a healthy 5.0%. Inflation levels remain low and are unlikely to show much improvement in the next few months. Although the Fed would prefer stronger inflation levels, other economic indicators remain strong enough such that the lack of inflation is unlikely to be the critical factor in the Fed rate decision. The Fed will also hold a policy meeting in early November, but it’s unlikely to make any rate moves just before the US presidential election.

EUR/USD Fundamentals

Thursday (October 27)

  • 7:00 Spanish Employment Rate. Estimate 18.9%. Actual 19.3%
  • 8:00 Eurozone M3 Money Supply. Estimate 5.1%
  • 8:00 Eurozone Private Loans. Estimate 1.9%
  • 12:30 US Core Durable Goods Orders. Estimate 0.2%
  • 12:30 US Unemployment Claims. Estimate 261K
  • 12:30 US Durable Goods Orders. Estimate 0.1%
  • 14:00 US Pending Home Sales. Estimate 1.2%
  • 14:30 US Natural Gas Storage. Estimate 71B

Upcoming New Events

Friday (October 28)

  • All Day – German Preliminary CPI. Estimate 0.1%
  • 12:30 US Advance GDP. Estimate 2.5%
  • 14:00 US Revised UoM Consumer Sentiment. Estimate 88.2

*All release times are EDT

* Key events are in bold

EUR/USD for Thursday, October 27, 2016

EUR/USD Oct 26 – 28 Chart

EUR/USD October 27 at 8:10 GMT

Open: 1.0909 High: 1.0913 Low: 1.0892 Close: 1.0912

EUR/USD Technical

  • EUR/USD was flat in the Asian and European sessions
  • 1.0821 is providing support
  • There is resistance at 1.0957

Further levels in both directions:

  • Below: 1.0821, 1.0708 and 1.0616
  • Above: 1.0957, 1.1054, 1.1150 and 1.1278
  • Current range: 1.0821 to 1.0957

OANDA’s Open Positions Ratio

EUR/USD ratio has shown slight gains towards short positions. Currently, long positions have a strong majority (60%), indicative of trader bias towards EUR/USD breaking out and moving to higher ground.

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