EUR/USD – Flat as German Retail Sales, Euro CPI Disappoint

The euro is flat on Friday, as EUR/USD trades in the low-1.13 range in the European session. On the release front, Eurozone releases were a disappointment. German Retail Sales posted a gain of 0.2%, while Eurozone CPI Estimate posted a sharp decline of 0.6%. In the US, today’s major events are Advance GDP and UoM Consumer Sentiment.

German Retail Sales posted a weak gain of 0.2%, marking a 3-month low. The estimate stood at 0.4%. Eurozone inflation remains anemic, as the Eurozone CPI Estimate came in at -0.6%, its second straight decline. In Spain, CPI followed suit with a decline of -1.4%, although there was good news from GDP, which improved to 0.7% in Q4.

US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

The Federal Reserve reiterated in its policy statement on Wednesday that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a “solid pace” thanks to the robust labor market. This vote of confidence helped the dollar post sharp gains against the euro. The Fed is widely expected to raise rates sometime during the year, so the Fed rate watch is sure to continue as the markets look for clues as to when the Fed will make a move.

EUR/USD for Friday, January 30, 2015

EUR/USD January 30 at 10:30 GMT

EUR/USD 1.1329 H: 1.1353 L: 1.1304

EUR/USD Technical

• EUR/USD has shown little movement in the Asian session. This has continued in the European session, with the pair testing resistance at 1.1340.
• 1.1231 remains a strong support level.
• On the upside, 1.1340 is under pressure. 1.1426 is stronger.
• Current range: 1.1231 to 1.1340

Further levels in both directions:

• Below: 1.1231, 1.1154, 1.1066 and 1.0906
• Above: 1.1340, 1.1426, 1.1525, 1.1634 and 1.1754

OANDA’s Open Positions Ratio

EUR/USD ratio pointing to gains is short positions on Friday. This is not consistent with the lack of movement we’re seeing from the pair. The ratio has a majority of short positions, indicative of trader bias towards the euro moving lower.

EUR/USD Fundamentals

• 7:00 German Retail Sales. Estimate 0.4%. Actual 0.2%.
• 7:45 French Consumer Spending. Estimate 0.3%. Actual 1.5%.
• 8:00 Spanish Flash CPI. Estimate -1.5%. Actual -1.4%.
• 8:00 Spanish Flash GDP. Estimate 0.5%. Actual 0.7%.
• 9:00 Italian Monthly Unemployment Rate. Estimate 13.5%. Actual 12.9%.
• 10:00 Eurozone CPI Flash Estimate. Estimate -0.5%. Actual -0.6%.
• 10:00 Eurozone Core CPI Flash Estimate. Estimate 0.6%. Actual 0.5%.
• 10:00 Eurozone Unemployment Rate. Estimate 11.5%. Actual 11.4%.
• 13:30 US Advance GDP. Estimate 3.0%.
• 13:30 US Advance GDP Price Index. Estimate 0.9%.
• 13:30 US Employment Cost Index. Estimate 0.6%.
• 14:45 US Chicago PMI. Estimate 57.7 points.
• 15:00 US Revised UoM Consumer Sentiment. Estimate 98.5 points.
• 15:00 US Revised UoM Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

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