EUR/USD – Euro Unchanged, German Consumer Confidence Dips

EUR/USD has edged lower on Thursday, as the pair trades at 1.0770. On the release front, GfK German Consumer Climate dipped to 9.8 points, shy of the forecast of 10.1 points. Later in the day, the eurozone releases consumer confidence data. The US will publish unemployment claims and New Home Sales. Federal Reserve Chair Janet Yellen will speak at an event in Washington, and FOMC members Neel Kashkari and Robert Kaplan will also deliver speeches on Thursday. On Friday, Germany and the eurozone release Manufacturing PMIs, and the US will publish durable goods orders.

German consumer confidence lost ground for a second straight month, as the GfK indicator fell to 9.8, its lowest level since November 2016. The drop is largely a result of higher inflation, as consumers are more concerned that their purchasing power has been reduced. Still, the German economy, the largest in Europe, remains in solid shape, as the economy is expected to expand 1.5% in 2017. German data is regarded as a bellwether for the eurozone, so the markets will be keeping a close eye on the upcoming German Manufacturing PMI report.

With a dearth of economic releases this week, the markets have been focusing on speeches from FOMC members. Earlier this week, Chicago Fed President Charles Evans said he expected the Fed to raise rates two more times this year. This projection was in line with the Fed’s dot plot (which remain unchanged) as well as last week’s rate statement. Although one could make a strong case that three rate hikes in 2017 would be impressive, the markets appear disappointed, and would like four hikes, given the strong performance of the US economy. The Fed’s cautious approach has soured sentiment towards the greenback, resulting in the dollar heading lower against its major rivals, including the euro. On Wednesday, EUR/USD touched a high of 1.0825, its highest level since the start of February.

EUR/USD Fundamentals

Thursday (March 23)

• 3:00 GfK German Consumer Climate. Estimate 10.1. Actual 9.8
• 5:00 ECB Economic Bulletin
• Tentative – ECB Long Term Refinancing Operation
• 8:30 US Unemployment Claims. Estimate 240K
• 8:45 US Fed Chair Janet Yellen Speech
• 10:00 Belgian NBB Business Climate. Estimate -0.6
• 10:00 US New Home Sales. Estimate 566K
• 10:30 US Natural Gas Storage. Estimate -147B
• 11:00 Eurozone Consumer Confidence. Estimate -6
• 12:30 US FOMC Member Neel Kashkari Speech
• 19:00 US FOMC Member Robert Kaplan Speech

Upcoming Key Events

Friday (March 24)

• 4:30 German Flash Manufacturing PMI. Estimate 56.6
• 5:00 Eurozone Flash Manufacturing PMI. Estimate 55.6
• 8:30 US Core Durable Goods Orders. Estimate 0.5%

*All release times are EST

*Key events are in bold

EUR/USD for Thursday, March 23, 2017

EUR/USD March 23 at 5:00 EST

Open: 1.0789 High: 1.0805 Low: 1.0768 Close: 1.0773

EUR/USD Technical

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

• 1.0708 is providing support
• 1.0873 is the next resistance line

Further levels in both directions:

• Below: 1.0708, 1.0616 and 1.0506
• Above: 1.0873, 1.0985 and 1.1097
• Current range: 1.0708 to 1.0873

OANDA’s Open Positions Ratio

EUR/USD ratio is showing little movement in the Thursday session. Currently, short positions have a majority (61%), indicative of trader bias towards EUR/USD breaking out and moving lower.

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.