EUR/USD – Euro Subdued as Markets Eye US GDP

EUR/USD is almost unchanged in the Friday session. Currently, the pair is trading just below the 1.07 level. On the release front, there are no major Eurozone releases. The US will release Advance GDP, with the estimate standing at 2.1 percent. We’ll also get a look at durable goods orders and UoM Consumer Sentiment.

There was positive news out of Germany, as consumer confidence continues to rise. The GfK Consumer Climate report rose to 10.2 points in December, climbing for a third consecutive month. Still, the Eurozone consumer is not as optimistic, as Eurozone Consumer Confidence, released earlier this week, was unchanged at -5 points. The Eurozone is showing some improvement, as manufacturing and inflation numbers continue to point upwards. On Thursday, an IMF report found that economic growth in the Eurozone was improving and projected growth of 1.6 percent in 2017 and 2018. However, the report also warned that political instability could on the Eurozone economy, with Britain’s departure from the EU and elections in several Eurozone countries where many voters are skeptical about European integration.

The Trump era is barely a week old, but there are already signs of the economic approach the administration appears to be taking. Trump declared in his inauguration address that he would put “America first”, and he has followed up with some protectionist measures. Trump formally withdrew the United States from the Trans-Pacific Partnership, a broad trade agreement that would have covered some 40 percent of gobal GDP. After announcing he would renegotiate the NAFTA agreement with Canada and Mexico, Trump took aim at his southern neighbor and announced that he would build a wall between the US and Mexico. Predictably, Mexico has reacted angrily to this move, and a scheduled meeting between Trump and Mexican President  Enrique Peña Nieto has been cancelled. In the latest salvo in the growing crisis, the White House White House suggested imposing a 20 percent tax on Mexican imports to pay for construction of the wall. Trump’s unconventional and disjointed approach to international trade could have major ramifications on global trade and could lead to financial instability in global markets.

Mexico Far Reaching Implications in APAC

Friday (January 27)

• 4:00 Eurozone M3 Money Supply. Estimate 4.9%. Actual 5.0%
• 4:00 Eurozone Private Loans. Estimate 2.0%. Actual 2.0%
• All Day – ECOFIN Meetings
• 8:30 US Advance GDP. Estimate 2.1%
• 8:30 US Core Durable Goods Orders. Estimate 0.5%
• 8:30 US Advance GDP Price Index. Estimate 2.1%
• 8:30 US Durable Goods Orders. Estimate 2.7%
• 10:00 US Revised UoM Consumer Sentiment. Estimate 98.2
• 10:00 US Revised UoM Consumer Inflation Expectations. Estimate 98.2

*All release times are EST

*Key events are in bold

EUR/USD for Friday, January 27, 2017

EUR/USD January 27 at 5:15 EST

Open: 1.0683 High: 1.0698 Low: 1.0658 Close: 1.0693

EUR/USD Technical

• EUR/USD edged lower in the Asian session but has rebounded in European trade
• 1.0616 is providing support
• 1.0708 is a weak resistance line

Further levels in both directions:

• Below: 1.0616, 1.0506 and 1.0414
• Above: 1.0708, 1.0873, 1.0985 and 1.1114
• Current range: 1.0616 to 1.0708

OANDA’s Open Positions Ratio

EUR/USD ratio has shown little movement this week. Currently, short positions have a majority (55%), indicative of trader bias towards EUR/USD continuing to move higher.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.