Yesterday’s trade saw EUR/USD within the range of 1.1170-1.1289. The pair closed at 1.1185, down 0.30% on a daily basis. It has been the first drop in the past three trading days.
At 6:18 GMT today EUR/USD was down 0.02% for the day to trade at 1.1185. The pair tested the daily S1 level, as it touched a daily low at 1.1173 at 3:10 GMT.
Today the cross may be influenced by a number of macroeconomic reports and other events as listed below.
Fundamentals
Euro area
ECB President Draghis statement
At 17:00 GMT the European Central Bank President Mario Draghi is expected to take a statement. High volatility of the euro crosses is usually present during such events.
Draghi will speak a day before the ECBs Governing Council conducts its non-monetary policy meeting.
United States
Balance of Trade
The deficit on US balance of trade probably expanded to USD 45.50 billion in August, according to market expectations. In July the trade gap shrank to USD 41.86 billion, which has been the lowest since February 2015, when a deficit of USD 35.40 billion was reported.
Total exports rose 0.4% to USD 188.5 billion in July. Exports of goods rose by USD 0.6 billion to reach USD 128.2 billion, supported by sales of automotive vehicles, parts, and engines (a USD 0.6 billion increase), industrial supplies and materials (a USD 0.3 billion increase) and nonmonetary gold (a USD 0.3 billion increase). Exports of consumer goods were USD 0.4 billion lower in July.
Total imports shrank 1.1% to USD 230.4 billion in July. Imports of goods fell by USD 2.7 billion to USD 189.6 billion, supported by lower purchases of consumer goods (a USD 2.6 billion decrease), pharmaceutical preparations (a USD 1.5 billion decrease) and cell phones and other household goods (a USD 1.3 billion decrease).
US exports to China went down 1.9% in July, while imports from China shrank 0.2%. At the same time, shipments to Canada dropped 8.3%, while exports to the European Union decreased 5.3% in July.
In case the trade gap expanded more than anticipated in August, this would have a strong bearish effect on the US dollar, because of the potential negative contribution to the countrys Gross Domestic Product. The official trade data are due out at 12:30 GMT.
Bond Yield Spread
The yield on German 2-year government bonds went as high as -0.248% on October 5th, or the highest level since October 1st (-0.246%), after which it slid to -0.256% at the close to add 1.3 basis points (0.013 percentage point) compared to October 2nd. It has been the first gain in the past three trading days.
The yield on US 2-year government bonds climbed as high as 0.617% on October 5th, after which it fell to 0.605% at the close to add 2.4 basis points (0.024 percentage point) compared to October 2nd.
The spread between 2-year US and 2-year German bond yields, which reflects the flow of funds in a short term, expanded to 0.861% on October 5th from 0.850% on October 2nd. The October 5th yield spread has been the largest one since October 1st, when the difference was 0.914%.
Meanwhile, the yield on German 10-year government bonds soared as high as 0.571% on October 5th, after which it slid to 0.566% at the close to add 5 basis points (0.05 percentage point) compared to October 2nd. It has been the first increase in the past three trading days.
The yield on US 10-year government bonds climbed as high as 2.063% on October 5th, after which it slipped to 2.051% at the close to add 6 basis points (0.06 percentage point) compared to October 2nd.
The spread between 10-year US and 10-year German bond yields widened to 1.485% on October 5th from 1.475% on October 2nd. The October 5th yield difference has been the largest one since October 1st, when the spread was 1.500%.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for EUR/USD are presented as follows:
R1 – 1.1196
R2 – 1.1207
R3 (range resistance) – 1.1218
R4 (range breakout) – 1.1250
S1 – 1.1174
S2 – 1.1163
S3 (range support) – 1.1152
S4 (range breakout) – 1.1120
By using the traditional method of calculation, the weekly pivot levels for EUR/USD are presented as follows:
Central Pivot Point – 1.1221
R1 – 1.1309
R2 – 1.1407
R3 – 1.1495
S1 – 1.1123
S2 – 1.1035
S3 – 1.0937
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