EUR/USD – Euro Rally Continues, US Consumer Data Eyed

The euro continues to gain ground on Wednesday session, after strong gains on Tuesday. Currently, EUR/USD is trading at 1.1830, up 0.27% on the day. In economic news, the eurozone trade surplus jumped to EUR 25.0 billion, above the estimate of EUR 21.2 billion. It’s a busy day in the US, with the focus on consumer data. CPI is expected to come in at 0.1% and Core CPI at 0.2%. Consumer spending is also expected to post low numbers, with the estimate for Retail Sales at 0.2% and Core Retail Sales at 0.0%.

The German economy is firing on all cylinders and showed no signs of fatigue in the third quarter. GDP jumped to 0.8% in the third quarter, recording its strongest quarter since 2014. Germany’s economy is growing at annualized rate of 2.8% in 2017. The catalyst for the strong reading was an increase in business investment, as sales of machinery and equipment increased. German fundamentals remain strong, as business and consumer confidence is high and unemployment remains at record-low levels. However, the positive economic conditions have failed to trigger much inflation, which has been a problem throughout the eurozone. German Final CPI dipped to 0.0% in October, the first time inflation has not moved higher since May. Germany has been the locomotive for the euorozone, and boosted traditional laggards such as France and Spain. Geopolitical concerns such as Catalonia and Brexit have the potential to crash the party, but in the meantime, eurozone indicators have generally been pointing upwards.

The heads of central banks met on Tuesday at an ECB event, with a focus on communication with the markets and the public. Federal Reserve Chair Janet Yellen acknowledged that the FOMC committee of 19 members posed problems, as members did not always speak with a unified voice. This led to the markets picking up on differences between policymakers, often leading to market volatility. Yellen admitted that this problem would not be solved anytime soon, saying it was “a work in progress”. To be fair, this is also an issue for the ECB, as the markets have on occasion reacted to comments from individual policymakers regarding monetary policy or quantitative easing.

EUR/USD Fundamentals

Wednesday (November 15)

• 2:45 French Final CPI. Estimate 0.1%. Actual 0.1%
• 3:00 US FOMC Member Charles Evans Speaks
• 5:00 Eurozone Trade Balance. Estimate 21.2B. Actual 25.0B
• Tentative – German 10-y Bond Auction
• 8:30 US CPI. Estimate 0.1%
• 8:30 US Core CPI. Estimate 0.2%
• 8:30 US Retail Sales. Estimate 0.2%
• 8:30 US Core Retail Sales. Estimate 0.0%
• 8:30 US Empire State Manufacturing Index. Estimate 25.5
• 10:00 US Business Inventories. Estimate 0.0%
• 10:30 US Crude Oil Inventories. Estimate -2.1M
• 16:00 US TIC Long-Term Purchases. Estimate 34.6B

Thursday (November 16)

• 5:00 Eurozone Final CPI. Estimate 1.4%
• 8:30 US Unemployment Claims. Estimate 235K
• 8:30 US Philly Fed Manufacturing Index. Actual 24.5

*All release times are GMT

*Key events are in bold

EUR/USD for Wednesday, November 15, 2017

EUR/USD for November 15 at 5:20 EDT

Open: 1.1798 High: 1.1848 Low: 1.1785 Close: 1.1830

EUR/USD Technical

EUR/USD inched lower in the Asian session and has posted gains in European trade

• 1.1777 is providing support
• 1.1876 is the next resistance line

Further levels in both directions:

• Below: 1.1777, 1.1657, 1.1574 and 1.1489
• Above: 1.1876, 1.1936 and 1.2033
• Current range: 1.1777 to 1.1876

OANDA’s Open Positions Ratio

EUR/USD is almost unchanged this week. Currently, short positions have a majority (64%), indicative of EUR/USD reversing directions and moving 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.