EUR/USD – Euro ticks lower, German and eurozone services PMI within expectations

EUR/USD is showing limited movement in the Monday session. Currently, the pair is trading at 1.1189, down 0.11% on the day. On the release front, the focus is on services PMI reports. German services PMI improved to 55.7, just above the estimate of 55.6. This marked the strongest score since September. The eurozone release dipped to 52.8, but still beat the forecast of 52.5. Eurozone Sentix Investor Confidence jumped to 5.3, well above the estimate of 1.1. As well, retail sales slowed to 0.0%, above the estimate of -0.1%. There are no economic releases in the U.S. On Tuesday, the U.S. releases JOLTS Job Openings.

Eurozone inflation is expected to climb to 1.7% in April, marking a 5-month high. The stronger reading is a reflection of higher oil prices, which has pushed prices higher. Inflation is moving closer to the ECB target of close to 2 percent, and if the upward trend continues, ECB rate-setters will have to give some thought to raising interest rate levels. The bank recently announced that no rate hikes were planned before the spring of 2020, and this dovish stance has made the euro less attractive to investors. The euro is down 2.4% since the start of the year.

In the U.S., the week ended with mixed employment numbers. Wage growth edged up to 0.2%, shy of the estimate of 0.3%. However, nonfarm payrolls sparkled, climbing to 263 thousand, up from 196 thousand a month earlier. The reading easily beat the forecast of 181 thousand. Despite the strong payrolls release, the euro managed to post slight gains on Friday.

 

EUR/USD Fundamentals

Monday (May 6)

• 3:00 Spanish Unemployment Change. Estimate -85.0K. Actual -91.5K

• 3:15 Spanish Services PMI. Estimate 54.9. Actual 53.1

• 3:45 Italian Services PMI. Estimate 54.4. Actual 50.4

• 3:50 French Final Services PMI. Estimate 50.5. Actual 50.5

• 3:55 German Final Services PMI. Estimate 55.6. Actual 55.7

• 4:00 Eurozone Final Services PMI. Estimate 52.5. Actual 52.8

• 4:30 Eurozone Sentix Investor Confidence. Estimate 1.1

• 5:00 Eurozone Retail Sales. Estimate -0.1%

• 10:00 US FOMC Member Williams Speaks

Tuesday (May 7)

• 2:00 German Factory Orders. Estimate 1.6%

• 5:00 EU Economic Forecasts

• 10:00 US JOLTS Job Openings. Estimate 7.35M

EUR/USD Technical

S1	S2	S1	R1	R2	R3
1.0950	1.1046	1.1120	1.1212	1.1300	1.1434

EUR/USD posted small gains in the Asian session and is flat in European trade

• 1.1120 is providing support

• 1.1212 is a weak resistance line

• Current range: 1.1120 to 1.1212

Further levels in both directions:

• Below: 1.1120, 1.1046 and 1.0950

• Above: 1.1212, 1.1300, 1.1434 and 1.1553