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EUR/USD Slumps after Temporary Relief

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EUR/USD Slumps after Temporary Relief

The euro weakened against its US counterpart Friday, as demand for the greenback improved despite disappointing producer inflation and consumer sentiment data.

The EURUSD declined 0.16 percent to 1.3530 following an intraday high of 1.3579. The pair is supported at 1.3818. On the upside, initial resistance is found at 1.3580. The pair is pacing for a weekly decline of more than 0.8 percent.

A combination of Eurozone and US reports on Thursday helped the EURUSD exchange advance slightly.

Eurozone industrial production accelerated 1.4 percent annually in April, the European Commission reported on Thursday.

In the US, the Commerce Department said on Thursday that retail sales advanced only 0.3 percent in May. Forecasts called for a gain of 0.6 percent.

US releases were equally disappointing Friday. The Labor Department said producer price inflation increased 2 percent annually in May, below estimates. Month-on-month, producer prices declined 0.2 percent.

Separately, Reuters and the University of Michigan said consumer confidence unexpectedly declined in June due to a weaker appraisal from low-income households. The consumer sentiment index slipped from 81.9 to 81.2. That was below the median forecast of 83.0.

In Eurozone data, employment increased 0.2 percent annually in the first quarter, the EC reported today. That followed an annualized drop of 0.4 percent in the final three months of 2013.

Quarter-on-quarter, employment growth in the Eurozone was 0.1 percent. Employment in Germany increased 0.3 percent on the quarter. Spain posted a gain of 0.2 percent. Ireland’s employment level increased 0.1 percent, following a gain of 0.5 percent in Q4.

Employment in France was unchanged for the third consecutive quarter.

Employment levels declined in Greece, Italy, Cyprus and Portugal, official data showed.

In other trading, the euro declined against the British pound. The EURGBP exchange rate declined 0.38 percent to 0.7974. The trend line shows initial support at 0.7961 and resistance at 0.8047.

The European Commission said UK employment surged 0.9 percent in the first quarter, following a gain of 0.6 percent in the previous quarter.

Year-on-year, UK employment levels increased 2.5 percent.

The Office for National Statistics reported on Wednesday that UK employment fell to 6.6 percent in the three months through April, as jobless claims declined 27,400.

The EURAUD rebounded slightly after declining in three of the last four days. The pair is trading at 1.4392, advancing 0.13 percent. Initial support is likely found at 1.4328 and resistance at 1.4453.

The EURJPY also recovered slightly on Friday, advancing 0.9 percent to 138.01. Initial support is situated at 1.3758. Key resistance is located at 1.3822.

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