EUR/USD – Limited Movement as Eurozone Retail Sales Slip

It continues to be a quiet week for EUR/USD, which is trading in the mid-1.31 range in Wednesday's European session. On the release front, Spanish Services PMI beat the estimate, while the Italian and Eurozone Services PMIs fell short of the forecast. There was more disappointing news as Eurozone Retail Sales came in at -0.4%, its first decline since January. This was slightly below the estimate of -0.3%. There are no major US releases on Wednesday.

German numbers have not impressed lately, and weakness in the Eurozone's largest economy has been weighing on the struggling euro. Earlier in the week, German Final GDP posted its first decline since January, with a reading of -0.2%. On Thursday, we'll get a look at German Factory Orders. After three declines in the past four readings, the markets are expecting a strong gain of 1.6% in the August release.

US data continues to shine. On Tuesday, ISM Manufacturing PMI impressed the markets, climbing to 59.0 points, its best showing since April 2011. The index easily beat the estimate of 57.0 points. The strong showing follows an unexpectedly strong GDP, which hit 4.2%. With the US and European economies moving in opposite directions, the US dollar has responded with its highest levels against the euro since September. Employment data will be in the spotlight for the remainder of the week, with the release of ADP Nonfarm Payrolls on Thursday, followed by the official Nonfarm Payrolls and the unemployment rate on Friday.

EUR/USD for Wednesday, September 3, 2014

EUR/USD September 3 at 9:35 GMT

EUR/USD 1.3135 H: 1.3156 L: 1.3122

EUR/USD Technical

• EUR/USD was uneventful in the Asian session. The pair touched a high of 1.3156 in the European session but was unable to consolidate these gains.
• 1.3175 remains an immediate resistance line. 1.3295 is stronger.
• On the downside, 1.3104 is under pressure. Will the pair break below this barrier? 1.2984 is the next support level.
• Current range: 1.3104 to 1.3175

Further levels in both directions:

• Below: 1.3104, 1.2984, 1.2806 and 1.2641
• Above: 1.3175, 1.3295, 1.3346 and 1.3487

OANDA's Open Positions Ratio

EUR/USD continues to show a strong majority of long positions, indicative of trader bias towards the euro breaking out and heading to higher ground.

EUR/USD Fundamentals

• 7:15 Spanish Services  PMI. Estimate 55.5 points. Actual 58.1 points.
• 7:45 Italian Services  PMI. Estimate 51.7 points. Actual 49.8 points.
• 8:00 Eurozone Final Services PMI. Estimate 53.5 points. Actual 53.1 points.
• 9:00 Eurozone Retail Sales. Estimate -0.3%. Actual -0.4%.
• 14:00 US Factory Orders. Estimate 10.9%.
• All Day – US Day Total Vehicle Sales. Estimate 16.5M.
• 18:00 US Beige Book.

*Key releases are highlighted in bold

*All release times are GMT

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