Friday, October 31, 2014

EUR/USD continues to lose ground on Friday

EUR/USD continues to lose ground on Friday, as the pair trades in the mid-1.25 range in the European session. On the release front, it’s a busy day in the Eurozone and the US. In the Eurozone, German Retail Sales posted a sharp decline of 3.2%. French Consumer Spending came in at -0.8%. In the US, today’s highlight is Revised UoM Consumer Sentiment. The markets are expecting the indicator’s upward trend to continue, with the estimate standing at 86.4 points.
It’s been a rough week for German releases, as the Eurozone’s largest economy continues to struggle. On Friday, Retail Sales were dismal, plunging by 3.5%. This marked the sharpest decline since October 2007. The markets had expected a decline of 0.8%. Consumer Climate and CPI softened in September, although Unemployment Change was better than expected. Meanwhile, Eurozone CPI edged upwards to 0.4%, matching the forecast. Core CPI and the Unemployment Rate remained unchanged, at 0.7% and 11.5% respectively.
EUR/USD weakened late in the Asian session. The euro is stable in European trade.
1.2688 remains a strong resistance line.
1.2518 is an immediate support level. 1.2407 is stronger.
Current range: 1.2518 to 1.2688
EUR/USD ratio is pointing to gains in long positions on Friday, continuing the trend seen a day earlier. This is not consistent with the movement of the pair, as the euro continues to lose ground. The ratio has a majority of long positions, indicative of trader bias towards the euro reversing direction and moving higher.