MarketPulse | Nov 06, 2017 06:06AM ET
The euro is showing little movement in the Monday session. Currently, EUR/USD is trading at 1.1604, down 0.03% on the day. On the release front, German Factory Orders gained 1.0%, above the estimate of -1.0%. German Services PMI slowed to 54.7, short of the estimate of 55.5 points. Eurozone Services PMI also softened, but the reading of 55.0 was just above the estimate of 54.9 points. As well, eurozone investor confidence and inflation reports beat the forecasts. There are no major events in the US. On Tuesday, ECB President Mario Draghi speaks at an ECB forum in Frankfurt, and Fed Chair Janet Yellen will deliver remarks at an event in Washington.
The euro posted gains on Friday, as US employment numbers disappointed the markets. After a decline in September, a result of the hurricanes which battered the US, nonfarm payrolls rebounded sharply with a reading of 261 thousand. This was a respectable number, but still fell short of the forecast of 312 thousand. Wage growth also disappointed, slowing to 0.0%, short of the estimate of 0.2%. This marked the first time in 2017 that wage growth did not increase, underlining persistent weak inflation. Although Fed Chair Yellen and other Fed policymakers have expressed confidence that inflation levels will rise, this is still yet to occur, despite strong growth and a labor market at capacity.
The guessing game is over at the Federal Reserve, as President Trump nominated Federal Reserve Governor Jerome Powell on Thursday to head the Federal Reserve. Powell will take over in February 2018, when Yellen’s term expires. The new chair is expected to hold the course with monetary policy, which has been marked by incremental and small rate hikes since December 2015. It’s all but a given that the Fed will raise interest rates in December, but the forecast for 2018 is less clear. If the US economy continues to grow at current levels, we could see up to three rate hikes next year. Powell will also be tasked with continuing to trim the Fed’s huge balance sheet of $4.2 billion. Last month, the Fed has started trimming the balance sheet by $10 billion/mth, but these cuts are expected to increase in size next year.
EUR/USD Fundamentals
Monday (November 6)
Tuesday (November 7)
*All release times are GMT
*Key events are in bold
EUR/USD for Monday, November 6, 2017
EUR/USD for November 6 at 5:10 EDT
Open: 1.1614 High: 1.1624 Low: 1.1596 Close: 1.1604
EUR/USD Technical
S1 | S2 | S1 | R1 | R2 | R3 |
1.1366 | 1.1489 | 1.1574 | 1.1657 | 1.1777 | 1.1876 |
EUR/USD was flat in the Asian session but and has ticked lower in European trade
Further levels in both directions:
OANDA’s Open Positions Ratio
EUR/USD is showing little movement in the Monday session. Currently, short positions have a majority (62%), indicative of EUR/USD reversing directions and moving upwards.
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