By Kenny Fisher
EUR/USD has edged lower in Tuesday trading. The pair is trading in the mid-1.37 range in the European session. U.S. releases continue to disappoint - this time it was Pending Home Sales, which tumbled 5.6% in September. For a second straight day, there are no releases out of the eurozone. Tuesday will be busy in the US, as the markets wait for four releases - Core Retail Sales, Retail Sales and PPI and Consumer Confidence. As well, the Federal Reserve meets for a two-day policy meeting which begins on Tuesday.
The new trading week got off to a poor start, as U.S. Pending Home Sales took a tumble in September. The key housing release declined 5.6%, its sharpest drop since April 2011. The estimate stood at 0.5%. The weak release continues a worrying downward trend in U.S. releases. Last week, Core Durable Goods Orders dropped -0.1%, well below the estimate of a 0.6% gain. This was the third straight decline for the indicator. UoM Consumer Sentiment couldn't find its footing, dropping from 77.5 to 73.2 points, its weakest showing in 2013. The estimate stood at 78.2 points. If we don't see stronger releases out of the U.S. this week, the euro could post further gains against the struggling dollar.
Euro PMIs were weak across the board late last week. PMI numbers out of Germany, France and the eurozone all fell short of their estimates and most posted a drop compared to the previous release. However, all except French Flash Manufacturing PMI remained above the 50 level, pointing to slight expansion. The latter has been below the 50 level since January 2012, indicating ongoing contraction in the French manufacturing sector.
The markets are carefully monitoring the FOMC policy meeting, which began on Tuesday. Federal Reserve policymakers have indicated that the Fed is unlikely to taper QE in 2013, and weak U.S. releases will only reinforce this sentiment, and tapering could be on hold to March or April of next year. As tapering is bullish for the dollar, the lack of action by the Fed will continue to weigh on the struggling dollar.
EUR/USD for Tuesday, October 29, 2013
EUR/USD October 29 at 11:35 GMT
EUR/USD 1.3761 H: 1.3794 L: 1.3754
- EUR/USD has edged lower in Tuesday trading. The pair has touched a low of 1.3754 in the European session.
- On the downside, 1.3649 is providing support. This is followed by a support line at 1.3585.
- The pair faces resistance at 1.3786. This is a weak line which could face pressure during the day. It is followed by resistance at 1.3893.
- Current range: 1.3649 to 1.3786
Further levels in both directions:
- Below: 1.3649, 1.3585, 1.3500 and 1.3410
- Above: 1.3786, 1.3893, 1.4000, 1.4143 and 1.4247
OANDA's Open Positions Ratio
EUR/USD ratio continues to indicate little change in Tuesday trading. This is consistent with what we are seeing from the pair, which is showing limited movement. The ratio continues to be dominated by short positions, indicating a strong trader bias towards the U.S. dollar moving higher against the euro.
EUR/USD is showing little movement on Tuesday. With the U.S. releasing a host of key events later in the day, we could see some volatility from the pair in the North American session.
- 12:30 U.S. Core Retail Sales. Exp. 0.4%.
- 12:30 U.S. PPI. Exp. 0.2%.
- 12:30 U.S. Retail Sales. Exp. 0.2%.
- 12:30 U.S. Core PPI. Exp. 0.1%.
- 13:00 U.S. S&P/CS Composite-20 HPI. Exp. 12.4%.
- 14:00 U.S. CB Consumer Confidence. Exp. 75.2 points.
- 14:00 U.S. Business Inventories. Exp. 0.3%.
*Key releases are highlighted in bold
*All release times are GMT
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.