EUR/USD – Euro subdued, German consumer confidence dips

EUR/USD is showing little movement in the Wednesday session. Currently, the pair is trading at 1.1283, down 0.09% on the day. On the release front, German GfK consumer climate dipped to 10.4 points, shy of the estimate of 10.5 points. In the U.S., the key event is Preliminary GDP, with an estimate of 3.6%. On Thursday, German Preliminary CPI is expected to remain at 0.2%. As well, Germany releases unemployment change and the ECB will publish its financial stability review. The U.S. releases Core PCE Price Index, personal spending and unemployment claims. As well, the FOMC releases the minutes of its November policy meeting.

Is the German economy in trouble? Confidence indicators are down in November, raising concerns about the strength of the economy. GfK consumer climate dropped to 10.4 points, its weakest level since May 2017. Earlier in the week,  Ifo Business Climate dropped to 102.3, missing the forecast of 102.0 points. This marked a 4-month low. The ongoing U.S-China trade war has hurt the German export sector, as German companies that export to both the U.S. and China are now facing higher tariffs. Germany’s economy posted a rare decline in the third quarter, with a contraction of 0.2%. Another problem is lower eurozone growth, as weak economic activity in the third quarter appears to be the story in the fourth quarter. As well, the looming departure of Britain from the European Union and the crisis over the Italian budget have weighed on business and consumer confidence levels in German.

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EUR/USD Fundamentals

Wednesday (November 28)

• 2:00 German GfK Consumer Climate. Estimate 10.5. Actual 10.4
• 4:00 Eurozone M3 Money Supply. Estimate 3.5%. Actual 3.9%
• 4:03 Eurozone Private Loans. Estimate 3.2%. Actual 3.2%
• 5:34 German 10-year Bond Auction. Estimate 0.34/1.6
• 8:30 US Preliminary GDP. Estimate 3.6%. 
• 8:30 US Goods Trade Balance. Estimate -76.7B
• 8:30 US Preliminary GDP Price Index. Estimate 1.7%
• 8:30 US Preliminary Wholesale Inventories. Estimate 0.5%
• 10:00 US New Home Sales. Estimate 583K
• 10:00 US Richmond Manufacturing Index. Estimate 16
• 10:30 US Crude Oil Inventories. Estimate 0.6M
• 12:00 US Fed Chair Powell Speaks

Thursday (November 29)

• All Day – German Preliminary CPI. Estimate 0.2%
• 3:00 ECB President Mario Draghi Speaks
• 3:55 German Unemployment Change. Estimate -10K
• Tentative – ECB Financial Stability Review
• 8:30 US Core PCE Price Index. Estimate 0.2%
• 8:30 US Personal Spending. Estimate 0.4%
• 8:30 US Unemployment Claims. Estimate 221K
• 10:00 US Pending Home Sales. Estimate 0.8%
• 14:00 US FOMC Meeting Minutes

*All release times are EST

*Key events are in bold

EUR/USD for Wednesday, November 28, 2018

EUR/USD for November 28 at 7:15 EST

Open: 1.1294 High: 1.1301 Low: 1.1267 Close: 1.1283

EUR/USD Technical

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

• 1.1212 is providing support
• 1.1300 was tested earlier in resistance and is  a weak line
• 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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