EUR/USD – Euro Trading Sideways, Investors Eye ECB Minutes

The euro is unchanged in the Thursday session. Currently the pair is trading at 1.2287, up 0.03% on the day. On the release front, German Ifo Business Climate dipped to 115.4, short of the estimate of 117.1 points. This marked the lowest level since September. Later in the day, the ECB releases the minutes of its January policy meeting. In the US, unemployment claims is expected to remain unchanged at 230 thousand. On Friday, Germany releases Final GDP and the eurozone publishes Final CPI.

The Federal Reserve released the minutes of its January meeting, and as expected, the benchmark rate was left unchanged at a rate between 1.25% and 1.50%. The message from policymakers was that further rate hikes could be in the cards, due to strong economic conditions in the US. In the words of the minutes, policymakers “anticipated that the rate of economic growth in 2018 would exceed their estimates of its sustainable longer-run pace and that labor market conditions would strengthen further”. At the December meeting, the Fed penciled in three rate hikes in 2018, and there was no reference to a quicker pace of hikes in the January minutes. As for inflation, the minutes did not reveal any concern. Most Fed members were of the opinion that inflation would rise towards the Fed target of 2 percent.

This week’s German and eurozone indicators have pointed downwards, and the euro has responded with a soft week, losing 1.0 percent. The well-respected ZEW economic sentiment reports dropped in February in Germany and the eurozone, although both indicators managed to beat their estimates. Eurozone consumer confidence remains weak, and the indicator dipped to zero, shy of the forecast of 1 point. On the manufacturing front, eurozone and German PMIs both fell in February and missed the forecasts. At the same time, both releases pointed to strong expansion, a reflection of strong global demand for European products.

EUR/USD Fundamentals

Thursday (February 22)

• 00:15 US FOMC Member Randal Quarles Speaks
• 2:45 French Final CPI. Estimate -0.1%. Actual -0.1%
• 4:00 German Ifo Business Climate. Estimate 117.1. Actual 115.4
• 7:30 ECB Monetary Policy Meeting Accounts
• 8:30 US Unemployment Claims. Estimate 230K
• 9:00 Belgian NBB Business Climate. Estimate 1.5
• 10:00 US CB Leading Index. Estimate 0.7%
• 10:00 US FOMC William Dudley Speaks
• 10:30 US Natural Gas Storage. Estimate -121B
• 11:00 US Crude Oil Inventories. Estimate 2.2M
• 12:10 US FOMC Member Raphael Bostic Speaks 

Friday (February 23)

• 2:00 German Final GDP. Estimate 0.6%
• 5:00 Eurozone Final CPI.  Estimate 1.3%

*All release times are GMT

*Key events are in bold

EUR/USD for Thursday, February 22, 2018

EUR/USD for February 22 at 6:35 EDT

Open: 1.2284 High: 1.2299 Low: 1.2260 Close: 1.2287

EUR/USD Technical

EUR/USD ticked lower in the Asian session and has recovered these losses in European trade

• 1.2286 remains fluid and is currently a weak support line
• 1.2357 is the next resistance line

Further levels in both directions:

• Below: 1.2286, 1.2200 and 1.2092
• Above: 1.2357, 1.2481, 1.2569 and 1.2660
• Current range: 1.2286 to 1.2357

OANDA’s Open Positions Ratio

EUR/USD ratio is showing small gains in short positions. Currently, short positions have a majority (55%), indicative of EUR/USD breaking out and moving to lower ground.

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.