The euro (EUR) experienced a decline against the US dollar (USD) for the second consecutive day on Thursday, trading around 1.1790—just slightly above its two-week low of 1.1777. The mixed economic data from the eurozone did little to bolster the currency, and attention has now shifted to upcoming decisions from the European Central Bank (ECB) regarding its monetary policy.
Earlier in the day, a surprising drop in eurozone retail consumption overshadowed some buoyancy from strong German factory orders. It seems that moderate risk aversion is also favoring the dollar.
On the U.S. side, Wednesday’s economic figures were also a mixed bag. The ISM Services Purchasing Managers Business Index surpassed expectations, but the employment sub-index fell short. The ADP Employment Change Report indicated sluggish growth in job creation for January, raising some alarms about the state of the labor market.
Most analysts anticipate that the ECB will maintain its current monetary policy during its announcement at 13:15 Japan time on Thursday. Meanwhile, U.S. jobless claims and JOLTS job openings are expected to be hot topics following the lackluster ADP jobs report from the previous day.
Today’s Euro Price
The latest data shows the euro’s performance against major currencies. On that front, the euro has been relatively strong against the British pound.
Daily Digest Market Mover: Focus on ECB
- The euro remains under pressure ahead of the ECB’s interest rate announcement. It is highly likely that rates will not change, but investors are keen to hear any shifts in rhetoric, especially as the euro’s strength raises concerns about potential deflationary impacts. Any dovish indicators could lead to further declines.
- This morning, eurozone retail sales reported a 0.5% decline for December, surpassing analysts’ predictions of a 0.2% drop. Additionally, November’s sales figures were revised down from a 0.2% increase to just a 0.1% rise.
- These disappointing retail numbers overshadowed a positive 7.8% increase in German factory orders for December, which was contrary to forecasts of a 2.2% decrease. The previous months’ industrial orders were also adjusted upward to a 5.7% rise.
- In the U.S., the ISM Services PMI indicated continued business activity growth in January, holding steady at 53.8, which was better than the anticipated slowdown to 53.5. However, the employment index dipped to 50.3 from 51.7 in December, indicating that robust economic activity is not translating into increased labor demand.
- The ADP Employment Change Report previously raised concerns about the labor market’s health. The January figures showed a mere 22,000 increase in private sector payrolls, significantly lower than the expected 48,000, and December’s numbers were also revised downward.
- Eurozone retail sales are projected to drop by 0.2% for December, negating the previous month’s 0.2% increase.
- In the U.S., new jobless claims are expected to rise to 212,000 for the week ending January 30, up from the previous count of 209,000.
- JOLTS job openings in the U.S. are anticipated to see a modest increase from 7.146 million in November to about 7.2 million in December.
Technical Analysis: EUR/USD Near 1.1775 Resistance
The EUR/USD pair is currently consolidating losses, with support resting at 1.1775. The Moving Average Convergence Divergence (MACD) is flat, indicating neutral momentum, while the Relative Strength Index (RSI) hovers around 40, suggesting a bearish trend.
A confirmation below the 1.1775 mark—evident in three lows from February 2nd and 3rd—would open the door for a drop to the January 23rd low of 1.1728 and possibly the January 22nd low of 1.1670. On the other hand, immediate resistance is around Wednesday’s peak of 1.1840, alongside the earlier support zone of 1.1900, which aligns with lows from January 28, 29, and 30.
