EUR/USD – Euro Quiet as Eurozone Inflation Misses Forecast

The euro has posted small losses in the Tuesday session. Currently, EUR/USD is trading at 1.1634, down 0.15% on the day. On the release front, Eurozone data was mixed, as CPI Flash Estimate missed the estimate, while Preliminary Flash GDP beat the forecast. In the US, today’s key event is CB Consumer Confidence, which is expected to improve to 121.1 points. Wednesday is a busy day, with the US releasing two key events – ADP Nonfarm Payrolls and ISM Manufacturing PMI. As well, the FOMC will release its monthly rate statement.

In the eurozone, inflation slowed in October. CPI Flash Estimate edged down to 1.4%, shy of the forecast of 1.5%. Core CPI Flash Estimate dipped to 0.9%, short of the estimate of 1.1%. There was good news as well, as Preliminary Flash GDP remained unchanged at 0.6%, above the estimate of 0.5%. Unemployment continues to head lower, dropping to 8.9%. This is the lowest level since March 2009. The ECB has announced that it will begin tapering its asset purchase program, as the eurozone economy has rebounded in 2017. Still, inflation remains persistently below the ECB’s target of around 2 percent. The asset purchase program has been extended to April 2018, but the ECB could implement an extension if economic data tails off or if inflation fails to move upwards.

Euro-Area Inflation Unexpectedly Slows as Economy Powers On

The Spanish government has dissolved the Catalan government and parliament, after imposing direct rule on Catalonia. The Catalan government declared independence just before Madrid invoked Article 155 of Spain’s constitution. The Spanish government has drawn up charges of rebellion against Catalan President Carles Puidgemont, but he has skipped town, and is reportedly in Belgium. It’s unclear what Puidgemont will do next – he could request political asylum or declare a government-in-exile. Elections have been slated for December 21, and two parties from Puidgemont’s coalition have declared they will participate in the election. With Catalans split down the middle on independence, this saga is likely to continue for some time.

EUR/USD Fundamentals

Tuesday (October 31)

• 2:30 French Flash GDP. Estimate 0.5%. Actual 0.5%
• 3:45 French Consumer Spending. Estimate 0.6%. Actual 0.9%
• 3:45 French Preliminary CPI. Estimate 0.1%. Actual 0.1%
• 5:00 Italian Monthly Unemployment Rate. Estimate 11.1%. Actual 11.1%
• 6:00 Eurozone CPI Flash Estimate. Estimate 1.5%. Actual 1.4%
• 6:00 Eurozone Core CPI Flash Estimate. Estimate 1.1%. Actual 0.9%
• 6:00 Eurozone Preliminary Flash GDP. Estimate 0.5%. Actual 0.6%
• 6:00 Italian Preliminary CPI. Estimate 0.1%. Actual -0.2%
• 6:00 Eurozone Unemployment Rate. Estimate 9.0%. Actual 8.9%
• 8:30 US Employment Cost Index. Estimate 0.7%
• 9:00 US S&P/CS Composite-20 HPI. Estimate 5.8%
• 9:45 US Chicago PMI. Estimate 60.2
• 10:00 US CB Consumer Confidence. Estimate 121.1

Wednesday (November 1)

• 8:15 US ADP Nonfarm Employment Change. Estimate 191K
• 10:00 US ISM Manufacturing PMI. Estimate 59.4
• 14:00 US FOMC Statement
• 14:00 US Federal Funds Rate. Estimate <1.25%

*All release times are GMT

*Key events are in bold

EUR/USD for Tuesday, October 31, 2017

EUR/USD Tuesday, October 31 at 6:25 EDT

Open: 1.1652 High: 1.1653 Low: 1.1625 Close: 1.1635

EUR/USD Technical

EUR/USD inched lower in the Asian session and has is flat in European trade

• 1.1611 is a weak support line
• 1.1712 is the next resistance line

Further levels in both directions:

• Below: 1.1611, 1.1489 and 1.1366
• Above: 1.1712, 1.1876, 1.1996 and 1.2018
• Current range: 1.1611 to 1.1712

OANDA’s Open Positions Ratio

EUR/USD is showing little movement in the Tuesday session. Currently, short positions have a majority (61%), indicative of EUR/USD continuing to move downwards.

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.