EUR/USD – Euro Slide Continues, German CPI Next

EUR/USD remains under pressure and has edged lower in the Thursday session. Currently, the pair is trading at 1.0740. On the release front, key releases out of the eurozone and the US could shake up the euro on Thursday. Germany will release Preliminary CPI, which is expected to soften to 0.4%. The US will publish Final GDP and unemployment claims. Final GDP is expected to edge up to 2.0%, compared to Preliminary GDP which came in at 1.9%. On the labor front, unemployment claims is expected to improve to 244 thousand, after an unexpectedly high figure of 261 thousand last week. On Friday, Germany releases retail sales and unemployment claims. The eurozone will publish CPI Flash Estimate while the US releases UoM Consumer Sentiment.

It’s been a busy week for the euro. The currency jumped above the 1.09 level on Monday, its highest level since November 2016. However, it’s been all downhill since then, as the euro struggles to stay above the 1.07 line. EUR/USD posted strong gains following President Trump’s failure to pass health legislation to replace parts of Obamacare. However, investors have moved on and are focusing on Trump’s next move, which apparently will be legislation to reform the tax code. Germany will release key consumer inflation and spending data on Thursday and Friday, and unexpected readings could affect the direction of the euro. The economy, the largest in Europe, has has enjoyed a robust first quarter in 2017. Stronger global trade has led to increased demand for German exports, notably cars and machinery. Germany’s GDP expanded 1.6% in 2016, its highest rate since 2012. The generally positive picture in Germany has boosted the eurozone economy and if the strong numbers continue, the ECB will be under more pressure to tighten monetary policy.

It’s been a series of growing pains for the Trump administration, which has stumbled out of the starting gate. Trump, who has been in office for more than two months, has yet to provide any details of an economic policy. Last week, Trump’s proposed

West Texas crude has moved higher for a third straight day, punching past the symbolic $50 level for the first time since March 9. In Thursday’s North American session, WTI crude futures are trading at $50.38. Brent Crude futures have climbed to $52.98, as the Brent premium has narrowed to $2.60. On the release front,  US Final GDP posted a gain of 2.1%, edging above the estimate of 2.0%. Unemployment claims jumped to 258 thousand, well above the forecast of 244 thousand. On Friday, we’ll get a look at consumer confidence levels, with the release of UoM Consumer Sentiment.

Crude oil has strengthened this week, but prices are still down sharply in March. The markets remained concerned about a global oil glut, as increasing US production has offset OPEC production cuts. US Crude inventories continue to show surpluses, most of which have been higher than the forecast. Although another surplus was recorded last week, the reading of 0.9 million was slightly smaller than the estimate of 1.2 million. Still, total US crude inventories have reached an all-time high of 534.0 million barrels, so oil prices may have trouble staying above the $50 level. OPEC has hinted that it may extend its production cut deal past June for another six months, but it’s questionable if this will boost oil prices, which have slipped since the agreement took effect on January 1.

It’s been a rough-and-tumble start for the Trump administration, which has been beset by controversy and crises since Trump assumed office in January. Trump has yet to provide any details of an economic policy, to the consternation of the markets. Last week, Trump’s proposed healthcare bill was dead on arrival before even being voted on, a humiliating defeat for the president. This setback has made the markets even more jittery about Trump, and the inquiry into the Trump administration’s links with Russia is gathering steam, which is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but the White House will need to improve coordination with Republican lawmakers to ensure that his next attempt to pass legislation is not a repeat of the healthcare debacle.

WTI/USD Fundamentals

Thursday (March 30)

• 8:30 US Final GDP. Estimate 2.0%. Actual 2.1%
• 8:30 US Unemployment Claims. Estimate 244K. Actual 258K
• 8:30 US Final GDP Price Index. Estimate 2.0%. Actual 2.1%
• 10:30 US Natural Gas Storage. Estimate -37B. Actual -43B
• 11:00 US FOMC Member Robert Kaplan Speech
• 23:01 British GfK Consumer Confidence. Estimate -7

Upcoming Key Events

Friday (March 31)

• 10:00 US Revised UoM Consumer Sentiment. Estimate 97.8

*All release times are GMT

*Key events are in bold

WTI/USD for Thursday, March 30, 2017

WTI/USD March 30 at 12:55 EST

Open: 49.60 High: 50.46 Low: 49.27 Close: 50.22

WTI USD Technical

WTI/USD showed little movement in the Asian and European sessions. The pair has posted gains in North American trade

• 46.54 is providing support
• 52.22 has weakened in resistance
• Current range: 46.54 to 52.22

Further levels in both directions:

• Below: 46.54, 40.57 and 33.22
• Above: 52.22, 58.32, 65.05 and 72.99

bill was dead on arrival before even being voted on, a humiliating defeat for the president. This setback has made the markets even more jittery about Trump, and the inquiry into the Trump administration’s links with Russia is gathering steam, which is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but the White House will need to improve coordination with Republican lawmakers to ensure that his next attempt to pass legislation is not a repeat of the healthcare debacle.

EUR/USD Fundamentals

Thursday (March 30)

• 3:00 Spanish Flash CPI. Estimate 2.6%. Actual 2.3%
• All Day – German Preliminary CPI. Estimate 0.4%
• Tentative – Italian 10-y Bond Auction
• 8:30 US Final GDP. Estimate 2.0%
• 8:30 US Unemployment Claims. Estimate 244K
• 8:30 US Final GDP Price Index. Estimate 2.0%
• 10:30 US Natural Gas Storage. Estimate -37B
• 11:00 US FOMC Member Robert Kaplan Speech

Upcoming Key Events

Friday (March 31)

• 2:00 German Retail Sales. Estimate 0.7%
• 3:55 German Unemployment Claims. Estimate -10K
• 5:00 Eurozone CPI Flash Estimate. Estimate 1.8%
• 10:00 US Revised UoM Consumer Sentiment. Estimate 97.8

*All release times are EST

*Key events are in bold

EUR/USD for Thursday, March 30, 2017

EUR/USD March 30 at 5:45 EST

Open: 1.0758 High: 1.0768 Low: 1.0730 Close: 1.0736

EUR/USD Technical

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

• 1.0708 is providing weak support
• 1.0873 is the next resistance line

Further levels in both directions:

• Below: 1.0708, 1.0616 and 1.0506
• Above: 1.0873, 1.0985 and 1.1097
• Current range: 1.0708 to 1.0873

OANDA’s Open Positions Ratio

EUR/USD ratio is showing movement towards long positions. Currently, short positions have a majority (57%), indicative of trader bias towards EUR/USD continuing to move lower.

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