EUR/USD – Euro slightly higher on light-data calendar

Kenny Fisher MarketPulse

EUR/USD has started the week with slight gains. Currently, the pair is trading at 1.1238, up 0.20% on the day. In economic news, it’s a light data calendar, so we’re unlikely to see much movement from the pair on Monday. Germany’s trade surplus widened to EUR 18.7 billion but still fell short the forecast of EUR 19.0 billion. The Eurozone Sentix Investor Confidence improved to -0.3, marking a four-month high. In the U.S., the sole event is factory orders, which is expected to decline by 0.5%. On Tuesday, the U.S. releases JOLTS Jobs Openings.

The eurozone economy continues to sputter, and it hasn’t helped that the German locomotive has also lost a gear. Germany’s manufacturing sector has been hit hard with the fallout of the nasty global trade war. This has dampened demand for German exports, such as vehicles and auto parts. German manufacturing PMI is showing contraction and factory orders have declined for four straight months. However, there was positive news on Friday, as German industrial production posted a strong gain of 0.7%, ending a streak of four successive declines. The improvement is a result of a surge in construction, but with demand from abroad remaining soft, the manufacturing sector is likely to face further headwinds.

With the eurozone mired in a slowdown, there was no surprise over the dour tone of the ECB minutes on Thursday. Policymakers noted that economic data continued to be soft, highlighting the manufacturing sector. The minutes expressed concern about continuing global trade concerns, which has had a negative effect on the eurozone economy. As well, inflation is expected to remain low. With the ECB acknowledging that the economic outlook is poor, there is little likelihood of an interest rate hike before 2020. This will make the euro less attractive to investors.

Risk rally stalls in Asia

Markets hit pause as central banks and Brexit risks loom

EUR/USD Fundamentals

Monday (April 8)

2:00 German Trade Balance. Estimate 19.0B. Actual 18.7B
4:30 Eurozone Sentix Investor Confidence. Estimate -1.7. Actual -0.3
10:00 US Factory Orders. Estimate -0.5%

Tuesday (April 9)

10:00 US JOLTS Job Openings. Estimate 7.54M

Open: 1.1216 High: 1.1242 Low: 1.1215 Close: 1.1240

EUR/USD Technical

S1	S2	S1	R1	R2	R3
1.1046	1.1120	1.1212	1.1300	1.1434	1.1553

EUR/USD has posted small gains in the Asian and in European sessions

1.1212 remains a weak support level
1.1300 is the next resistance line
Current range: 1.1212 to 1.1300

Further levels in both directions:

Below: 1.1212, 1.1120, 1.1046 and 1.0951
Above: 1.1300, 1.1434 and 1.1553

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

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