EUR/USD – Euro ticks lower, investors eye U.S retail sales

EUR/USD continues to move higher has posted slight gains in the Friday session.  In European trade, the pair is trading at 1.1354, up 0.22% on the day. On the release front, Germany’s Wholesale Price Index dipped from 0.4% to 0.3% in October, but still beat the estimate of 0.2%. The markets are keeping a close eye on eurozone inflation indicators. Final CPI and Final Core CPI are both expected to improve in October, with forecasts of 2.2% and 1.1%, respectively. There are no major U.S releases on the schedule.

After sharp losses at the start of the week, the euro has reversed directions and recovered, despite some dismal numbers out of Germany. On Wednesday, Germany reported that GDP had declined 0.2%, marking the first contraction in GDP since 2015. If investors are concerned that the largest economy in the eurozone is slowing, they didn’t respond by dumping their euros. German officials put a spin on the weak release, saying that the contraction was largely due to weakness in the auto sector as a result of new pollution standards. In truth, it’s likely that the skid is also due to the global trade war, which has also resulted in U.S. tariffs on European products. Another alarm signal is weak investor confidence. German ZEW Economic Sentiment posted a second straight soft release for November, with a reading of -24.1 points. This points to deep pessimism on the part of institutional investors and analysts. The ZEW added that investors did not expect a rapid recovery from the current weakness, which could weigh on the euro.

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EUR/USD Fundamentals

Friday (November 16)

• 2:00 German WPI. Estimate 0.2%. Actual 0.3%
• 3:30 ECB President Draghi Speaks
• 5:00 Eurozone Final CPI. Estimate 2.2%
• 5:00 Eurozone Final Core CPI. Estimate 1.1%
• 6:00 Italian Trade Balance. Estimate 2.87B
• 8:00 German Buba President Weidmann Speaks
• 9:15 US Capacity Utilization Rate. Estimate 78.3%
• 9:15 US Industrial Production. Estimate 0.2%
• 16:00 US TIC Long-Tem Purchases. Estimate 46.2B

*All release times are DST

*Key events are in bold

EUR/USD for Friday, November 16, 2018

EUR/USD for November 16 at 4:10 EST

Open: 1.1329 High: 1.1368 Low: 1.1322 Close: 1.1354

EUR/USD Technical

EUR/USD ticked lower in the Asian session but then recovered. The pair has posted sharp losses in European trade

• 1.1212 is the next support level
• 1.1300 has switched to a resistance line after sharp losses by GBP/USD on Thursday
• Current range: 1.1212 to 1.1300

Further levels in both directions:

• Below: 1.1212, 1.1120 and 1.0992
• Above: 1.1300, 1.1434, 1.1553 and 1.1685

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