EUR/USD – Euro Steady as Markets Eye US Consumer Confidence and Construction Numbers

EUR/USD continues to trade quietly in the mid-1.35 range on Tuesday. In economic news, US Pending Homes Sales continues to sputter, as the key indicator posted a fifth straight decline. On Tuesday, we’ll get a look at US Building Permits data for September and October, as the former was not released on time due to the government shutdown last month. Today’s other key event is CB Consumer Confidence. There are no Eurozone releases on Tuesday.

The week got off to a disappointing start as Pending Home Sales posted a decline of -0.6%, well off the estimate of 2.2%. The key indicator has now posted five straight declines, pointing to trouble in the housing sector. We’ll get a look at construction releases later on Tuesday, and weak numbers could hurt the dollar.

The markets continue to see improving numbers out of Germany, the Eurozone’s largest economy. Ifo Business Climate, a key indicator, wrapped up the week on a high note. The indicator jumped to 109.3 points in October, up from 107.4 a month earlier. As well, German PMIs pointed to continuing expansion in the services and manufacturing sectors. However, other members in the Eurozone are lagging behind Germany, and record low interest rates from the ECB has not boosted inflation or economic growth in the region.

With inflation remaining sluggish despite recent rate cuts, the ECB is considering cutting its deposit rate, which currently stands at 0.0%. However, a move into negative territory would represent unchartered territory and could have negative consequences for the economy. So if the ECB does go ahead and reduce to deposit rate, we could see a “mini cut” of less than 0.25%. The OECD is also expressing concern about the dangers of deflation in the Eurozone and has urged the ECB to consider implementing quantitative easing.  ECB Governing Council member Ardo Hansson confirmed that the ECB could take further steps such as lowering the benchmark or deposit rates, and such sentiments will likely weigh on the euro.

EUR/USD for Tuesday, November 26, 2013

EUR/USD November 26 at 11:05 GMT

EUR/USD 1.3533 H: 1.3571 L: 1.3524

EUR/USD Technical

• EUR/USD is steady in Tuesday trading. The euro is under pressure as the pair touched a high of 1.3571  in the European session.
• On the downside, the round number of 1.3500 continues to provide support. This is a weak line which could face strong pressure during the day. This is followed by a support line at 1.3410.
• The pair is facing resistance at 1.3585. Next, there is resistance at 1.3649, which has remained intact since late October.
• Current range: 1.3500 to 1.3585

Further levels in both directions:

• Below: 1.3500, 1.3410, 1.3325, 1.3265 and 1.3149
• Above: 1.3585, 1.3649, 1.3786 and 1.3893

OANDA’s Open Positions Ratio

EUR/USD ratio is almost unchanged in Tuesday trading. This is reflected in the pair’s movement, as the pair is showing little movement. A large majority of the open positions remain short, indicative of a trader bias towards the dollar posting gains against the euro.

The pair has had an uneventful week, as it continues to trade in the low-1.35 range. With the US releasing construction and consumer confidence numbers  later on Tuesday we could see some movement from the pair during the North American session.

EUR/USD Fundamentals

• 13:30 US Building Permits. Estimate. 0.94M.
• 13:30  September Data – US Building Permits. Estimate 0.94M.
• 14:00 US S&P/CS Composite-20 HPI. Estimate 13.0%.
• 14:00 US HPI. Estimate 0.5%.
• 15:00 US CB Consumer Confidence. Estimate 72.2 points.
• 15:00 US Richmond Manufacturing Index. Estimate 3 points.

*Key releases are highlighted in bold

*All release times are GMT

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