EUR/USD – Euro Edges Higher, Markets Await US Data, Fed Minutes

The euro has posted slight gains in the Wednesday session. Currently, EUR/USD is trading at 1.1770, up 0.26% on the day. On the release front, the sole eurozone indicator is Consumer Confidence, which is expected to remain unchanged at -1 point. In the US, it’s a busy day, so we could see some movement from the pair during the North American session. The markets are expecting Core Durable Goods to slow to 0.4%, and unemployment claims to drop to 241 thousand. UoM Consumer Sentiment is forecast to soften to 98.2 points. As well, the Federal Reserve releases the minutes of its November policy meeting. On Thursday, Germany and the Eurozone release manufacturing PMI reports, and Germany will publish final GDP. The ECB will release the summary from its October policy meeting.

The political deadlock continues in Germany, as President Angela Merkel faces her toughest challenge since coming to power 12 years ago. With the Free Democratic Party pulling out of coalition talks on the weekend, Merkel appears unable to form a coalition government. Merkel has said she would rather hold another election than try to govern with a shaky minority government. President Frank-Walter Steinmeier has urged the parties to redouble their efforts in order to reach an agreement, warning that another election would cause uncertainty in German as well as Europe. The crisis in the eurozone’s largest economy could paralyze the European Union, as Merkel has become the unofficial leader of the bloc. Euro-supporters such as French President Emmanuel Macron have ambitious plans to strengthen European integration, but this will have to wait until Merkel can straighten out her domestic challenges.

US housing indicators continue to beat expectations. On Monday, it was the turn of Existing Home Sales, which climbed to a 4-month high. On Friday, Building Permits and Housing Starts impressed the markets. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Starts also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter.

EUR/USD Fundamentals

Wednesday (November 22)

• Tentative – German 30-year Bond Auction
• 8:30 US Core Durable Goods Orders. Estimate 0.4%
• 8:30 US Unemployment Claims. Estimate 241K
• 8:30 US Durable Goods Orders. Estimate 0.4%
• 10:00 Eurozone Consumer Confidence. Estimate -1
• 10:00 US Revised UoM Consumer Sentiment. Estimate 98.2
• 10:00 US Revised UoM Inflation Expectations
• 10:30 US Crude Oil Inventories. Estimate -1.4M
• 12:00 US Natural Gas Storage. Estimate -51B
• 14:00 US FOMC Meeting Minutes

Thursday (November 23)

• 2:00 German Final GDP. Estimate 0.8%
• 3:30 German Flash Manufacturing PMI. Estimate 60.4
• 4:00 Eurozone Flash Manufacturing PMI. Estimate 58.3
• 7:30 ECB Monetary Policy Meeting Accounts

*All release times are GMT

*Key events are in bold

EUR/USD for Wednesday, November 22, 2017

EUR/USD for November 22 at 5:20 EDT

Open: 1.1739 High: 1.1774 Low: 1.1733 Close: 1.1770

EUR/USD Technical

EUR/USD has edged upwards in the Asian and European sessions

• 1.1657 is providing support
• 1.1777 remains a weak line in resistance. It could break during the Wednesday session

Further levels in both directions:

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

OANDA’s Open Positions Ratio

EUR/USD is showing slight movement towards long positions. Currently, short positions have a majority (59%), indicative of EUR/USD reversing directions and moving downwards.

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