Yesterday’s trade saw EUR/USD within the range of 1.0842-1.0967. The pair closed at 1.0862, plummeting 0.96% on a daily basis, or at the sharpest rate since October 28th, when it fell 1.17%. Wednesday has been the third straight trading day of losses. The daily low has been the lowest level since July 21st, when the cross registered a low of 1.0810.
According to Binary Tribunes analysis on historical volatility, the average intraday volatility for the pair was 0.879% in October, or the lowest since December 2014, when average volatility was estimated at 0.696%. At the same time, the average daily volatility for EUR/USD was 0.806% in October, or the lowest one since January 2015. Back then the average daily volatility was estimated at 0.790%.
At 7:21 GMT today EUR/USD was losing 0.06% for the day to trade at 1.0858. The pair touched a daily low at 1.0850 at 7:25 GMT, testing the daily S1 level, while trading below the weekly central pivot level for a second straight day.
Today EUR/USD trading may be influenced by a number of macroeconomic reports as listed below.
Fundamentals
Euro area
ECBs Economic Bulletin
At 9:00 GMT the European Central Bank (ECB) will release its new publication, which is to replace the Monthly Bulletin. The Economic Bulletin includes detailed analysis of current and future economic conditions and price stability risks in the Euro region from the bank’s perspective. It will be published two weeks after ECB’s monetary policy decision.
Retail Sales
Annualized retail sales in the Euro region as a whole probably rose 3.0% in September, according to the median forecast by experts, after in August sales climbed at a pace of 2.3%. If expectations were met, September would be the 21st consecutive period of growth and also the sharpest annual rate of increase since February 2015, when sales rose 3.0%. In monthly terms, retail sales probably climbed 0.2% in September, according to market expectations, following a flat performance in August. This is a short-term indicator, which provides key information about consumer spending trend on a national scale. In case the index of retail sales rose at a faster-than-projected pace, this would have a moderate bullish effect on the euro, because of the positive implications for the regions inflationary pressure and overall growth. Eurostat is expected to publish the official data at 10:00 GMT.
United States
Initial, Continuing Jobless Claims
The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on October 30th, probably increased to 264 000, according to market expectations, from 260 000 in the previous week. If so, this would be the highest number of claims since the business week ended on September 25th.
The 4-week moving average, an indicator lacking seasonal effects, was 259 250, marking a decrease of 4 000 compared to the preceding weeks unrevised average. It has been the lowest level for this average since December 15th 1973, when 256 750 claims were reported.
The business week, which ended on October 23rd has been the 34th consecutive week, when jobless claims stood below the 300 000 threshold.
Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or increased further, this would have a moderate bearish effect on the US dollar.
The number of continuing jobless claims probably remained unchanged at the seasonally adjusted 2 144 000 during the business week ended on October 23rd. It has been the lowest number of claims since the week ended on November 4th 2000, when a level of 2 110 000 was reported. The figure represented a decrease by 37 000 compared to the revised up number of claims reported in the week ended on October 9th. This indicator reflects the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.
The Department of Labor is to release the weekly report at 12:30 GMT.
Bond Yield Spread
The yield on German 2-year government bonds went as high as -0.301% on November 4th, after which it slid to -0.314% at the close to add 0.001 percentage point in comparison with November 3rd.
The yield on US 2-year government bonds climbed as high as 0.853% on November 4th, after which it closed at 0.849% to add 7.9 basis points (0.079 percentage point) compared to November 3rd, while marking a third trading day of gains in a row.
The spread between 2-year US and 2-year German bond yields, which reflects the flow of funds in a short term, widened to 1.163% on November 4th from 1.085% on November 3rd. The November 4th yield spread has been the largest one in at least six months.
Meanwhile, the yield on German 10-year government bonds soared as high as 0.609% on November 4th, or the highest level since October 21st (0.639%), after which it slid to 0.600% at the close to add 2.5 basis points (0.025 percentage point) compared to November 3rd, while marking a third straight trading day of increase.
The yield on US 10-year government bonds climbed as high as 2.241% on November 4th, or the highest level since September 17th (2.298%), after which it slipped to 2.227% at the close to add 0.009 percentage point compared to November 3rd, while marking a third consecutive trading day of gains.
The spread between 10-year US and 10-year German bond yields narrowed to 1.627% on November 4th from 1.643% on November 3rd. The November 4th yield difference has been the lowest one since November 2nd, when the spread was 1.613%.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for EUR/USD are presented as follows:
R1 – 1.0873
R2 – 1.0885
R3 (range resistance) – 1.0896
R4 (range breakout) – 1.0931
S1 – 1.0851
S2 – 1.0839
S3 (range support) – 1.0828
S4 (range breakout) – 1.0793
By using the traditional method of calculation, the weekly pivot levels for EUR/USD are presented as follows:
Central Pivot Point – 1.0998
R1 – 1.1103
R2 – 1.1200
R3 – 1.1305
S1 – 1.0901
S2 – 1.0796
S3 – 1.0699
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