The euro is flat on Monday, as EUR/USD is trading at 1.1370 in the European session. On the release front, Eurozone Unemployment Rate remained at 10.3%, matching the forecast. Spanish Unemployment Change was excellent, posting a sharp decline of 58.2 thousand. This was the indicator’s strongest reading in seven months. Eurozone Sentix Investor Confidence improved slightly to 5.7 points, but this was well short of the estimate of 6.9 points. In the US, it’s a quiet start to the week, with no major releases on the schedule.
The US labor market remains robust, as underscored by Friday’s employment numbers. Nonfarm Payrolls came in at 215 thousand, above the estimate of 205 thousand. The unemployment rate edged up to 5.0%. However, wage growth remains weak, as Average Hourly Earnings posted a small gain of 0.3%, close to the estimate of 0.3%.
The US dollar suffered its worst week in two months, as EUR/USD surged some 230 points. The euro took full advantage of Janet Yellen’s very dovish comments last week at a speech in New York. Yellen warned of risks to the US economy from uncertainty in the global markets and the slowdown in China, and poured cold water on speculation of an April interest rate hike. With the US economy in good shape, why did Yellen sound ultra-dovish in her comments? Yellen was likely reacting to comments by several Fed members prior to her speech, which were very hawkish in tone, some going as far as calling for a rate hike this month. The contradictory messages coming out of Fed points to a split in the FOMC concerning monetary policy, although Yellen is likely to have the last word. Mixed messages out of the Fed creates uncertainty that the markets could do without, so analysts will be paying close attention to the Fed minutes on Wednesday, looking for clues as to further rate projections. Traders should be prepared for some volatility after the release of the minutes.
EUR/USD Fundamentals
Monday (April 4)
- 7:00 Spanish Employment Change. Estimate +21.3K. Actual -58.2K
- 8:30 Eurozone Sentix Investor Confidence. Estimate 6.9 points. Actual 5.7 points
- 9:00 Eurozone Unemployment Rate. Estimate 10.3%. Actual 10.3%
- 9:00 Eurozone PPI. Actual -0.5%. Actual -0.7%
- 14:00 US Factory Orders. Actual -1.5%
- 14:00 US Labor Market Conditions Index
Tuesday (April 5)
- 14:00 US ISM Non-Manufacturing PMI. Estimate 54.1 points
*Key events are in bold
*All release times are GMT
EUR/USD for Monday, April 4, 2016
EUR/USD April 4 at 9:20 GMT
Open: 1.1395 Low: 1.1362 High: 1.1413 Close: 1.1365
EUR/USD Technical
| S1 | S2 | S1 | R1 | R2 | R3 |
| 1.1087 | 1.1172 | 1.1278 | 1.1378 | 1.1495 | 1.1609 |
- EUR/USD was flat in the Asian session and has posted slight losses in the European session
- 1.1378 has switched to a resistance role following losses by EUR/USD on Monday. It is a weak line
- 1.1278 is providing support
Further levels in both directions:
- Below: 1.1278, 1.1172 and 1.1087
- Above: 1.1378, 1.1495, 1.1609 and 1.1712
- Current range: 1.1278 to 1.1378
OANDA’s Open Positions Ratio
EUR/USD ratio has shown movement towards short positions, which have a strong majority (69%). This is indicative of strong trader bias towards EUR/USD continuing to drop to lower levels.