EUR/USD has posted considerable gains on Thursday, erasing most of this week’s losses. Currently, the pair is trading at 1.1373, up 0.55% on the day. On the release front, there are no German or eurozone events, but stronger risk appetite on Thursday has boosted European stock markets as well as the euro. In the U.S, unemployment claims are expected to edge lower to 213 thousand. The ISM Manufacturing PMI is forecast to drop for a second straight month, with an estimate of 59.0 points. On Friday, Germany and the eurozone release Manufacturing PMI reports. In the U.S, the focus will shift to employment data, with the release of wage growth and nonfarm payrolls.
Eurozone inflation is expected to rise in October. CPI Flash Estimate ticked higher from 2.1% to 2.2% and Core CPI Flash Estimate rose to 1.1%, up from 0.9%. Both of these readings matched the forecasts. The stronger inflation numbers back up ECB President Mario Draghi’s stance that inflation in showing a “relatively vigorous pick-up”. Higher oil prices are one reason behind stronger inflation numbers.
Germany, the bellwether for the rest of the eurozone, is also experiencing higher inflation, which climbed 2.4% in October. Although inflation is on the move, growth in the eurozone has softened in the third quarter. Eurozone GDP posted a weak gain of 0.2% in the third quarter, down from the 0.4% gain in the second quarter. On an annualized basis, eurozone growth slipped to 1.7% in Q3, down from 2.1% in Q2. The situation in Germany is even worse, with the German central bank forecasting zero growth in the third quarter. Confidence levels have also headed lower across the eurozone. Lower growth and weaker confidence have translated into sharp losses for the euro, which declined 2.5% in October. This marked the currency’s worst monthly performance since May.
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EUR/USD Fundamentals
Thursday (November 1)
- 7:30 US Challenger Job Cuts
- 8:30 US Preliminary Productivity. Estimate 2.2%
- 8:30 US Preliminary Unit Labor Costs. Estimate 1.1%
- 8:30 US Unemployment Claims. Estimate 213K
- 9:45 US Final Manufacturing PMI. Estimate 55.9
- 10:00 US ISM Manufacturing PMI. Estimate 59.0
- 10:00 US Construction Spending. Estimate 0.2%
- 10:00 US ISM Manufacturing Prices. Estimate 67.5
- 10:30 US Natural Gas Storage. Estimate 53B
- All Day – US Total Vehicle Sales. Estimate 17.1M
Friday (November 2)
- 3:00 German Import Prices. Estimate 0.4%
- 4:55 German Final Manufacturing PMI. Estimate 52.3
- 5:00 Eurozone Final Manufacturing PMI. Estimate 52.1
- 8:30 US Average Hourly Earnings. Estimate 0.2%
- 8:30 US Nonfarm Employment Change. Estimate 193K
- 8:30 US Unemployment Rate. Estimate 3.7%
*All release times are DST
*Key events are in bold
EUR/USD for Thursday, November 1, 2018
EUR/USD for November 1 at 6:40 DST
Open: 1.1312 High: 1.1388 Low: 1.1309 Close: 1.1373
EUR/USD Technical
| S1 | S2 | S1 | R1 | R2 | R3 |
| 1.1120 | 1.1212 | 1.1300 | 1.1434 | 1.1553 | 1.1611 |
EUR/USD posted small gains in the Asian session and stronger gains in European trade
- 1.1300 is providing support
- 1.1434 is the next resistance line
- Current range: 1.1300 to 1.1434
Further levels in both directions:
- Below: 1.1300, 1.1212 and 1.1120
- Above: 1.1434, 1.1553, 1.1611 and 1.1735