Wednesday, November 5, 2014

EUR/USD has posted losses on Wednesday

EUR/USD has posted losses on Wednesday, wiping out the gains seen a day earlier. In the European session, the pair is trading in the high-1.24 range in the European session. In the Eurozone, Services PMIs met expectations, but Retail Sales looked awful, posting a sharp decline of -1.3%. In the US, there are two major events – ADP Non-Farm Employment Change and US ISM Non-Manufacturing PMI.
Eurozone and Spanish Services PMI were almost unchanged from last month and met expectations. The Italian release improved to 50.8, pointing to expansion in the services industry for the first time in three months. The news was not as positive from Retail Sales, which came in at -1.3%, much worse than the estimate of -0.6%. This marked the indicator’s sharpest decline since January. Consumer spending is a key component of economic growth, and is one more indication of the poor state of the Eurozone economy.
EUR/USD lost ground late in the Asian session and this trend continues in European trade.
1.2518 continues to be active and is a weak resistance line. 1.2688 is stronger.
1.2407 is the next support level.
Current range: 1.2407 to 1.2518 EUR/USD ratio is unchanged on Wednesday. This is not consistent with the pair’s movement, as the euro has lost ground. The ratio has a majority of long positions, indicative of trader bias towards the euro reversing direction and moving higher.