EUR/USD – Euro Dips, US Consumer Confidence Next

EUR/USD has posted slight losses in the Tuesday session. Currently, the pair is trading at 1.2412, down 0.30% on the day. On the release front, German Import Prices declined 0.6%, weaker than the estimate of -0.3%. This marked the first decline since July. In the US, CB Consumer Confidence is expected to rise to 131.2 points. On Wednesday, Germany GfK Consumer Climate and the US publishes Final GDP.

The ECB will stay the course with regard to its stimulus program, according to a senior ECB policymaker. Governing Council member Erkki Liikanen said on Tuesday that although eurozone growth remains robust, inflation could remain lower than expected. With the current bond purchase program set to expire in September, there is speculation that the ECB will wind up the program, after years of pursuing an accommodative policy. If inflation does move closer to the ECB’s target of around 2 percent, there is a greater likelihood that the bank will not extend stimulus, and could entertain raising interest rates in 2018.

The business sector continues to have strong confidence in the German economy, but there is concern about possible headwinds due to recent tariffs imposed by the Trump administration. The German Ifo Business Climate report dipped to 114.7 in March, which matched the forecast. However, this marked a second straight drop, and was the lowest reading in 11 months. The report attributed lower business morale to concerns that tariffs could hurt transatlantic trade, as well as the negative impact of a stronger euro. On the bright side, tax reform in the US and the economic rebound in the eurozone have increased the demand for German goods and services.

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What Trade War Fears?

EUR/USD Fundamentals

 Tuesday (March 27)

• 2:00 German Import Prices. Estimate -0.3%. Actual -0.6%
• 3:00 Spanish Flash CPI. Estimate 1.5%. Actual 1.2%
• 4:00 Eurozone M3 Money Supply. Estimate 4.6%. Actual 4.2%
• 4:00 Eurozone Private Loans. Estimate 3.0%. Actual 2.9%
• 9:00 US S&P/CS Composite-20 HPI. Estimate 6.1%
• 10:00 US CB Consumer Confidence. Estimate 131.2
• 10:00 US Richmond Manufacturing Index. Estimate 23
• 11:00 US FOMC Member Raphael Bostic Speaks

 Wednesday (March 28)

• 2:00 German GfK Consumer Climate. Estimate 10.7
• Tentative – Italian 10-year Bond Auction
• 8:30 US Final GDP. Estimate 2.7%
• 8:30 US Final GDP Price Index. Estimate 2.3%
• 8:30 US Goods Trade Balance. Estimate -74.1B
• 8:30 US Preliminary Wholesale Inventories. Estimate 0.6%
• 10:00 US Pending Home Sales. Estimate 2.1%
• 10:30 US Crude Oil Inventories
• 12:00 US FOMC Member Raphael Bostic Speaks

*All release times are DST

*Key events are in bold

EUR/USD for Tuesday, March 27, 2018

EUR/USD for March 27 at 6:15 DST

Open: 1.2449 High: 1.2477 Low: 1.2410 Close: 1.2412

EUR/USD Technical

EUR/USD was flat in the Asian session and has edged lower in European trade

• 1.2319 is providing support
• 1.2460 is the next line in resistance

Further levels in both directions:

• Below: 1.2319, 1.2235, 1.2092 and 1.2025
• Above: 1.2460, 1.2581 and 1.2662
• Current range: 1.2319 to 1.2460

OANDA’s Open Positions Ratio

EUR/USD ratio is showing little movement in the Tuesday session. Currently, short positions have a majority (60%), indicative of EUR/USD continuing to move to lower 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.