Yesterday’s trade saw EUR/USD within the range of 1.0794-1.0888. The pair closed at 1.0834, down 0.43% on a daily basis, while extending losses from Friday.
At 7:11 GMT today EUR/USD was gaining 0.30% for the day to trade at 1.0867. The pair touched a daily high at 1.0869 at 7:09 GMT, overcoming the range resistance level (R3). Resistance may be encountered in the area around 38.20% Fibonacci level (1.0896), which reflects the descent from October 15th high to December 3rd low. On the other hand, support may be received at the hourly 55-day EMA, then at December 7th low (1.0794) and finally at the 23.60% Fibonacci level (1.0753).
Today EUR/USD trading may be influenced by a number of macroeconomic reports as listed below.
Fundamentals
Euro area
Gross Domestic Product – final estimate
The second GDP estimate in the Euro zone for Q3 2015 probably confirmed the preliminary estimate of 1.6% growth, which was reported on November 13th. It has been the fastest annual rate of growth since Q1 2011, when euro regions economy expanded at a final 2.5%. In Q2 the areas GDP rose at an annualized final rate of 1.5%, which exceeded the preliminary figure.
In quarterly terms, the second GDP estimate probably also confirmed the preliminary figure, pointing to a 0.3% growth during the third quarter of the year, according to market expectations. In Q2 economy registered a 0.4% expansion, which came above the preliminary growth rate.
According to provisional data published on November 13th, among Eurozone member states, German economy grew 0.3% in Q3 compared to Q2, slowing down from a 0.4% expansion in the second quarter. Italian economy grew at the slowest quarterly rate in a year, or 0.2%. The seasonally adjusted GDP in Belgium, Spain, Latvia and Austria (+0.2%, +0.8%, +0.4% and +0.1% respectively) rose at a slower pace, while Portugals GDP remained flat. Estonian and Greek economies contracted 0.5% each in Q3, while Finnish GDP shrank 0.6%. French economy registered a faster quarterly growth (0.3%), Lithuania reported a 0.5% growth, while growth rates in Cyprus, the Netherlands and Slovakia remained the same as in the prior quarter (+0.5%, +0.1% and +0.9% respectively), according to the report by the Eurostat.
In case the second GDP estimate exceeded market expectations, this would have a strong bullish effect on the euro. The official report is to be released at 9:00 GMT.
United States
Job Openings
The number of job openings in the United States probably dropped to 5.525 million in October from a month ago, according to the median forecast by experts. In September 5.526 million job openings were reported, or the most since July. This indicator refers to all job positions that are open, but not filled on the last business day of the month. Job openings are part of the Job Openings and Labor Turnover Survey (JOLTS), which gathers data from about 16 400 non-farm establishments including retailers and manufacturers, as well as federal, state, and local government entities in the 50 states and the District of Columbia. The survey assesses the unmet demand for labor in the labor market. Higher-than-projected number of openings will usually have a limited bullish effect on the US dollar. The Bureau of Labor Statistics is to release the official data at 15:00 GMT.
Bond Yield Spread
The yield on German 2-year government bonds went as high as -0.291% on December 7th, after which it closed at -0.317% to lose 2.1 basis points (0.021 percentage point) in comparison with December 4th. It has been seventh drop in the past eleven trading days.
The yield on US 2-year government bonds climbed as high as 0.967% on December 7th, after which it closed at 0.935% to lose 1.2 basis points (0.012 percentage point) compared to December 4th. It has been the fourth drop in the past sixteen trading days and also a second consecutive one.
The spread between 2-year US and 2-year German bond yields, which reflects the flow of funds in a short term, widened to 1.252% on December 7th from 1.243% on December 4th. The December 7th yield spread has been the largest one since December 3rd, when the difference was 1.266%.
Meanwhile, the yield on German 10-year government bonds soared as high as 0.705% on December 7th, after which it slid to 0.592% at the close to lose 9.8 basis points (0.098 percentage point) compared to December 4th. It has been the seventh drop in the past eleven trading days.
The yield on US 10-year government bonds climbed as high as 2.292% on December 7th, after which it slipped to 2.236% at the close to lose 3.7 basis points (0.037 percentage point) compared to December 4th. It has been the eleventh drop in the past sixteen trading days and also a second consecutive one.
The spread between 10-year US and 10-year German bond yields expanded to 1.644% on December 7th from 1.583% on December 4th. The December 7th yield difference has been the largest one since December 3rd, when the spread was 1.652%.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for EUR/USD are presented as follows:
R1 – 1.0843
R2 – 1.0851
R3 (range resistance) – 1.0861
R4 (range breakout) – 1.0886
S1 – 1.0825
S2 – 1.0817
S3 (range support) – 1.0807
S4 (range breakout) – 1.0782
By using the traditional method of calculation, the weekly pivot levels for EUR/USD are presented as follows:
Central Pivot Point – 1.0802
R1 – 1.1066
R2 – 1.1246
R3 – 1.1510
S1 – 1.0622
S2 – 1.0358
S3 – 1.0178
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