EUR/USD – Euro in Holding Pattern Ahead of Fed Minutes

It’s been a uneventful week for the euro, as EUR/USD trades in the high-1.13 range on Wednesday. On the release front, we’ll get our first look at key US data on Wednesday, with the release of Building Permits and PPI. The highlight of the day is the Federal Reserve minutes. In Europe, the sole release was the German 10-year Bond Auction, which dropped to 0.37%, marking the 13th straight month that the yield has dropped. As well, Greece votes for a new president, which could be an important development in the midst of the bailout crisis.

The Greece bailout crisis continues to swirl this week, as Eurozone finance ministers (Eurogroup) abruptly halted talks on Monday aimed at reaching an agreement between Greece and its creditors. The bailout agreement expires at the end of February, and Eurogroup head Jeroen Dijsselbloem said that Greece must accept the next installment of funds under current bailout conditions. For its part, Greece has demanded easier austerity conditions while continuing to have access to bailout funds. Another meeting of the Eurogroup has been planned for Friday, and the markets will be nervously following developments on the bailout front during the week. The stakes are high, as lack of an agreement could lead to Greece leaving the Eurozone and abandoning the euro.

The markets are keeping a close eye on the Fed minutes, which will be released later on Wednesday. With the US economy showing strong growth and positive employment numbers, there are widespread expectations for a rate hike as early as the summer. Any hints regarding a hike could provide a broad boost for the US dollar.

EUR/USD for Wednesday, February 18, 2015

EUR/USD February 18 at 11:10 GMT

EUR/USD 1.1384 H: 1.1416 L: 1.1378

EUR/USD Technical

• EUR/USD has showed limited movement in the Asian and European sessions.
• On the downside, 1.1340 is under strong pressure. 1.1231 is stronger.
• 1.1426 is a weak resistance line. 1.1525 is stronger.
• Current range: 1.1340 to 1.1426

Further levels in both directions:

• Below: 1.1340, 1.1231, 1.1154, 1.1066 and 1.0909
• Above: 1.1426, 1.1525, 1.1634, 1.1754, 1.1802 and 1.1926

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in short positions on Wednesday, reversing the direction seen a day earlier. This is consistent with the pair’s movement, as the euro has posted small losses. The ratio has a majority of short positions, indicative of trader bias towards the euro moving lower.

EUR/USD Fundamentals

• 10:33 German 10-year Bond Auction. Actual 0.37%.
• 13:30 US Building Permits. Estimate 1.08M.
• 13:30 US PPI. Estimate -0.4%.
• 13:30 US Core PPI. Estimate 0.1%.
• 13:30 US Housing Starts. Estimate 1.07M.
• 14:15 US Capacity Utilization Rate. Estimate 79.9%.
• 14:15 US Industrial Production. Estimate 0.5%.
• 19:00 US FOMC Meeting Minutes.
• 21:00 US TIC Long-Term Purchases. US 41.3B.
• 22:00 US FOMC Member Jerome Powell Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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