We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The trio of central banks overseeing the commodity currencies have already cut their main rates to all-time lows. Get your market update from @CVecchioFX here: https://t.co/OSUXrN5P3j https://t.co/3nwDel6e28
  • The tension from March continues to subside, allowing for the $USD to slide to fresh two-month-lows. Get your currencies market update from @JStanleyFX here: https://t.co/bRSRjUqg6Z https://t.co/Q35YpIZEd2
  • López Obrador hopes #USMCA will help tighten trade relationships between the US and Mexico. Get your currencies market update from @HathornSabin here: https://t.co/bZrUKSCGaS https://t.co/MZ7UoiWWRj
  • The $AUD may suffer as relations between Australia and China deteriorate amid dwindling growth prospects. Euro traders will be closely watching progress in talks about a €500b recovery fund proposal. Get your market update from @ZabelinDimitri here: https://t.co/LkEFJViPWY https://t.co/sofO135ElG
  • The US Dollar could rise against #ASEAN currencies such as the Singapore Dollar as US-China tensions seem to escalate. The Indian Rupee is also looking ahead of local 1Q GDP data. Get your ASEAN currencies market update from @ddubrovskyFX here:https://t.co/LkEFJViPWY https://t.co/ZGFaQQ3Hr2
  • The #Euro is the big driver here for DXY as it is 57% of the index. It is rising now and trying to break above the March 27 high at 11147. Get your $EURUSD technical analysis from @PaulRobinsonFX here:https://t.co/6gt3F9LuGP https://t.co/73SaL5AeXD
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/EIC9YqfTec
  • Anybody else think that casting directors in movies are some of the most underrated people when it comes to giving a film/series credit?
  • No https://t.co/EoBltaP17k
  • Crude #oilprices may face heightened liquidation pressure as the cycle-sensitive #commodity finds itself under the pressure of resilient resistance and a vulnerable, multi-week rising channel. Get your crude #oil market update from @ZabelinDimitri here: https://t.co/cGPX4qcOH1 https://t.co/0U4JMJVFuf
EUR/USD- Trading the German Unemployment Report

EUR/USD- Trading the German Unemployment Report

2013-02-28 01:00:00
David Song, Strategist
Share:

Trading the News: German Unemployment Change

What’s Expected:

Time of release: 02/28/2013 8:55 GMT, 3:55 EST

Primary Pair Impact: EURUSD

Expected: 0K

Previous: -16K

DailyFX Forecast: 5K to 15K

Why Is This Event Important:

Unemployment in Germany is expected to hold flat during February after contracting 16K the month prior, and a slowdown in job growth may drag on the EURUSD as it dampens the economic outlook for the euro-area. As the EU scales back its GDP forecast and sees the monetary union contracting 0.3% this year, the fundamental developments coming out of Europe may fall short of market expectations, and the European Central Bank (ECB) may continue to carry out its easing cycle in 2013 in an effort to stem the risk for a prolonged recession.

Recent Economic Developments

The Upside

Release

Expected

Actual

IFO – Business Climate (FEB)

104.9

107.4

Industrial Production s.a. (MoM) (DEC)

0.2%

0.3%

Factory Orders s.a. (MoM) (DEC)

0.7%

0.8%

The Downside

Release

Expected

Actual

Gross Domestic Product (4Q P)

-0.5%

-0.6%

Trade Balance (DEC)

15.0B

12.0B

Retail Sales (MoM) (DEC)

-0.1%

-1.7%

The ongoing improvement in business sentiment paired with the expansion in industrial outputs may produce another decline in unemployment, and a positive development may increase the appeal of the single currency as it encourages an improved outlook for growth. However, the slowdown in global trade along with the recent decline in private sector consumption may weigh on job growth, and we may see a protracted recovery in the labor market amid the ongoing slack in the real economy.

Potential Price Targets For The Release

Forex_EURUSD-_Trading_the_German_Unemployment_Report_body_ScreenShot020.png, EUR/USD- Trading the German Unemployment Report

As the relative strength index on the EURUSD bounces back from oversold territory, the rebound from 1.3017 may gather pace over the remainder of the week, and a positive development may put the 1.3250 pivot back on the radar as it dampens bets for an ECB rate cut. However, a weak labor report may prompt another selloff in the EURUSD, and we may see the pair struggle to hold above the 1.3000 figure as the region faces a deepening recession.

How To Trade This Event Risk

Trading the given event risk may not be as clear cut as some of our previous trades, but a positive development may set the stage for a long Euro trade as it raises the outlook for growth. Therefore, if unemployment narrows from the previous month, we will need to see a green, five-minute following the print to generate a long entry on two-lots of EURUSD. Once these conditions are met, we will set the initial stop at the nearby swing low or a reasonable distance from the entry, and this risk will establish our first objective. The second target will be based on discretion, and we will move the stop on the second lot to cost once the first trade hits its mark in an effort to preserve our profits.

In contrast, the slowdown in global trade along with the weakness in private consumption may encourage businesses to keep a lid on hiring, and a dismal report may spark a selloff in the exchange rate as it dampens the outlook for growth. As a result, if unemployment rises from the previous month, we will carry out the same strategy for a short euro-dollar trade as the long position laid out about, just in the opposite direction.

Impact that the change in German Unemployment has had on EUR during the last month

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

JAN 2013

1/31/2013 8:55 GMT

8K

-16K

+4

+18

January 2013German Unemployment Change

Forex_EURUSD-_Trading_the_German_Unemployment_Report_body_ScreenShot019.png, EUR/USD- Trading the German Unemployment Report

Unemployment in Europe’s largest economy slipped another 16K during the month of January after contracting 2K the month prior, while the jobless rate unexpectedly narrowed to 6.8% from 6.9% to mark the first decline since December 2011. Indeed, the EURUSD tracked higher following the positive print, with the pair climbing towards 1.3570, and the euro-dollar continued to gain ground during the North American trade as it ended the day at 1.3575.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com.

Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, please follow this link.

New to FX? Watch this Video

Questions? Comments? Join us in the DailyFX Forum

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.