EUR/USD is unchanged in the Monday session. Currently, the pair is trading at 1.1697 down 0.01% on the day. On the release front, the focus is on the service sector. Eurozone and German Final Services both dropped in May, but met expectations. Eurozone retail sales remained unchanged at 0.1%, but this missed the forecast of 0.5%. In the US, the ISM Non-Manufacturing PMI is expected to rise to 57.9 points. We’ll also get a look at JOLTS Job Openings, which is expected to drop to 6.49 million.
The euro remains calm this week, as Italy appears to have wrapped up months of political turmoil, as the country finally has a government. The new coalition is made up of two euro-sceptic parties, the League and the Five-Start Movement, which is likely to result in friction between Rome and the European Union. After President Sergio Matterella vetoed the choice for finance minister last week, it appeared that the country might be headed for another election and more political uncertainty, and Italian stocks and bonds dropped sharply. However, the crisis is over after the prime minister-elect, Giuseppe Conte, found another candidate for the key finance post. The new government has said it will drastically reduce immigration and raise spending, planks which could put it at odds with EU policy. Although the League and Five Star Movement have not issued any threats to withdraw from the EU or even hold a referendum on EU membership, there is plenty of concern among investors that the fourth largest economy in the eurozone is being steered by a government with a populist, anti-establishment platform.
Is a new global trade war brewing? There are some ominous signs that the US and some major trading partners are headed in that direction, after the Trump administration slapped tariffs on the European Union, Mexico and Canada on Thursday. The U.S had granted all three trading partners a temporary extension but cited insufficient progress on trade talks as the reason for the tariffs. This has triggered promises of retaliatory tariffs on US products, and tempers were short at the G-7 meeting of finance ministers in Canada on the weekend. U.S Treasury Secretary Steve Mnuchin faced sharp criticism from other finance ministers over the tariffs. The leaders of the G-7 meet in Canada on June 8, and European leaders want to take trade and try to find some compromise with the U.S in order to remove the tariffs.
Tuesday (June 5)
- 2:45 French Government Budget Balance. Actual -54.3B
- 3:15 Spanish Services PMI. Estimate 56.4. Actual 56.4
- 3:45 Italian Services PMI. Estimate 52.9. Actual 53.1
- 3:50 French Final Services PMI. Estimate 54.3. Actual 54.3
- 3:55 German Final Services PMI. Estimate 52.1. Actual 52.1
- 4:00 Eurozone Final Services PMI. Estimate 53.9. Actual 53.8
- 5:00 Eurozone Retail Sales. Estimate 0.5%. Actual
- 9:45 US Final Services PMI. Estimate 55.7
- 10:00 US ISM Non-Manufacturing PMI. Estimate 57.9
- 10:00 US JOLTS Job Openings. Estimate 6.49M
- Tentative – IBD/TIPP Economic Optimism. Estimate 54.2
- 13:30 German Buba President Weidmann Speaks
*All release times are DST
*Key events are in bold
EUR/USD for Tuesday, June 6, 2018
EUR/USD for June 6 at 6:25 DST
Open: 1.1699 High: 1.1717 Low: 1.1683 Close: 1.1697
EUR/USD ticked lower in the Asian session and has recovered in European trade
- 1.1613 is providing support
- 1.1718 remains a weak line. It could be tested during the Tuesday session
Further levels in both directions:
- Below: 1.1613, 1.1448, 1.1312 and 1.1212
- Above: 1.1718, 1.1809 and 1.1915
- Current range: 1.1613 to 1.1718
OANDA’s Open Positions Ratio
EUR/USD ratio is showing gains in long positions. Currently, long positions have a majority (59%), indicative of trader bias towards EUR/USD breaking out and climbing to higher ground.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.