EUR/USD – Euro subdued, shrugs off soft German consumer confidence

EUR/USD has ticked lower in the Tuesday session. Currently, the pair is trading at 1.1184, down 0.08% on the day. In economic news, German GfK Consumer Climate slipped to 10.1, short of the estimate of 10.4 points. In the U..S, CB consumer confidence is expected to remain at high levels. The April reading came in at 129.2 and the May estimate stands at 130.1. On Wednesday, Germany releases unemployment change and the ECB posts its semi-annual financial stability review.

As the locomotive of the eurozone economy, German indicators are a bellwether for the rest of the eurozone. Consumer confidence took a hit in May, as GfK Consumer Climate slipped to 10.1 points, down from 10.4 in April. This was the lowest score since April 2017. With the escalation in U.S-China trade tensions, there is no end in sight to the tariffs which have been imposed on European goods, which has dampened consumer confidence. We’ll get a look at the health of consumer spending on Thursday, when Germany releases retail sales. After a decline of 0.2% in April, the markets are expecting a rebound in May, with a forecast of 0.4%.

The euro has shrugged off the dramatic European parliamentary elections, but could face headwinds as a fractured European parliament takes shape. Far-right parties across Europe made gains at the expense of centrist parties, as voters vented their frustration by supporting nationalist and environmentalist parties. In France, Marine Le Pen’s National Rally party came in first, handing a stinging defeat to President Macron. In Germany, Chancellor Angela Merkel’s conservatives lost ground, and voters in the U.K sent a strong message to Labor and the Conservatives, as Nigel Farage’s Brexit party won the most seats. The ramifications are already being felt, as Greek Prime Minister Alexis Tsipras has called a general election after his Syriza party fared poorly in the EU elections.

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EUR/USD Fundamentals

Tuesday (May 28)

• 2:00 German GfK Consumer Climate. Estimate 10.4. Actual 10.1
  
• 2:00 German Import Prices. Estimate 0.5%. Actual 0.3%
• 4:00 Eurozone M3 Money Supply. Estimate 4.4%. Actual 4.7%
• 4:00 Eurozone Private Loans. Estimate 3.3%. Actual 3.4%
• 9:00 US HPI. Estimate 0.2%
• 9:00 US S&P/CS Composite-20 HPI. Estimate 3.1%
• 10:00 US CB Consumer Confidence. Estimate 130.1

Wednesday (May 29)

• 3:55 German Unemployment Change. Estimate -8K
• 4:00 ECB Financial Stability Review

*All release times are DST

*Key events are in bold

EUR/USD for Tuesday, May 28, 2019

EUR/USD for May 28 at 6:20 DST

Open: 1.1193 High: 1.1198 Low: 1.1176 Close: 1.1186

EUR/USD Technical

EUR/USD posted small losses in the Asian session and is showing little change in European trade

• 1.1120 is providing support
• 1.1212 is the next resistance line
• Current range: 1.1120 to 1.1212

Further levels in both directions:

• Below: 1.1120, 1.1046 and 1.0950
• Above: 1.1212, 1.1300, 1.1434 and 1.1553

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