EUR/USD – Euro edges higher as Eurozone CPI matches estimate

EUR/USD has posted slight gains in the Monday session. Currently, the pair is trading at 1.1648, up 0.20% on the day. On the release front, it’s a quiet start to the week. Eurozone Final CPI ticked lower to 2.0%, matching the estimate. In the U.S, the Empire State Manufacturing Index is expected to drop to 23.2 points.

With only a handful of key fundamental events early in the week, investors will be keeping a close eye on the US-China trade spat. The two economic giants have already exchanged tariffs on the other’s products, and President Trump has threatened to sharply up the ante and impose tariffs of some $200 billion on China. Trump may be bluffing, but his rhetoric could torpedo trade talks with China. The timing of any new tariffs remains uncertain, as well as the level of the tariffs – will they be 10% or a far more punitive 25%? Investors remain on alert, and the specter of another tariff announcement from the U.S and the likely retaliatory response from China could boost the dollar this week against the euro.

The U.S ended the week with mixed numbers. Retail sales in August dropped to 0.1%, down from 0.5% a month earlier. This missed the estimate of 0.4%. Core retail sales followed a similar trend, falling from 0.6% to o.3%. It missed the forecast of 0.5%. These key consumer spending numbers come on the heels of CPI, which came in at just 0.2% and missed the estimate of 0.3%. There was better news from UoM Consumer Sentiment in September, which jumped to 100.8, above the estimate of 96.7 points, This marked the first time that the indicator cracked the 100-level since March.

Dollar holds gains as market awaits tariffs

Another 200 billion in tariffs looks more likely than not

EUR/USD Fundamentals

Monday (September 17)

• 4:00 Italian Trade Balance. Estimate 4.82B. Actual 5.68B
• 5:00 Eurozone Final CPI. Estimate 2.0%. Actual 2.0%
• 5:00 Eurozone Final Core CPI. Estimate 1.0%. Actual 1.0%
• 6:00 German Buba Monthly Report
• 8:30 US Empire State Manufacturing Index. Estimate 23.2

*All release times are DST

*Key events are in bold

EUR/USD for Monday, September 17, 2018

EUR/USD for September 17 at 5:35 DST

Open: 1.1625 High: 1.1661 Low: 1.1618 Close: 1.1648

EUR/USD Technical

EUR/USD has posted small gains in the Asian and European sessions

• 1.1637 was tested in support earlier on Monday. It is a weak line
• 1.1718 is the next resistance line

Further levels in both directions:

• Below: 1.1637, 1.1553, 1.1434 and 1.1312
• Above: 1.1718, 1.1840 and 1.1961
• Current range: 1.1637 to 1.1718

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