EUR/USD – Euro Yawns on Mixed Euro Data

EUR/USD remains under pressure in the Friday session. Currently, the pair is trading slightly below the 1.07 level. On the release front, eurozone numbers were mixed. German data was sharp, as Retail Sales jumped 1.8%, well above the estimate of 0.7%. As well, unemployment claims dropped by 30 thousand, compared to the estimate of 10 thousand. However, eurozone inflation data was not as strong, as CPI Flash Estimate dropped to 1.5%, short of the forecast of 1.8%. In the US, today’s highlight is UoM Consumer Sentiment, which is expected to improve to 97.8 points.

It’s been an eventful week for the euro, which has shown strong movement in both directions. 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. The German economy, the largest in Europe, is looking sharp and 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 rocky start for the Trump administration, which has been beset by controversy and crises since Donald 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.

US Inflation, Income and Spending Figures Eyed

EUR/USD Fundamentals

Friday (March 31)

• 2:00 German Retail Sales. Estimate 0.7%. Actual 1.8%
• 2:45 French Consumer Spending. Estimate 0.3%. Actual -0.8%
• 2:45 French Preliminary CPI. Estimate 0.7%. Actual 0.6%
• 2:55 German Unemployment Claims. Estimate -10K. Actual -30K
• 5:00 Eurozone CPI Flash Estimate. Estimate 1.8%. Actual 1.5%
• 5:00 Eurozone Core CPI Flash Estimate. Estimate 0.8%. Actual 0.7%
• 5:00 Italian Preliminary CPI. Estimate 0.1%. Actual 0.0%
• 8:30 US Core PCE Price Index. Estimate 0.2%
• 8:30 US Personal Spending. Estimate 0.2%
• 8:30 US Personal Income. Estimate 0.4%
• 9:00 US FOMC Member William Dudley Speech
• 9:45 US Chicago PMI. Estimate 57.2
• 10:00 US Member Neel Kashkari Speech
• 10:00 US Revised UoM Consumer Sentiment. Estimate 97.8
• 10:00 US Revised UoM Inflation Expectations

*All release times are EST

*Key events are in bold

EUR/USD for Friday, March 31, 2017

EUR/USD March 31 at 6:05 EST

Open: 1.0687 High: 1.0597 Low: 1.0672 Close: 1.0689

EUR/USD Technical

EUR/USD was flat in the Asian session and is showing limited movement 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 1.04
• Above: 1.0708, 1.0873, 1.0985 and 1.1097
• Current range: 1.0616 to 1.0708

OANDA’s Open Positions Ratio

EUR/USD ratio is showing movement towards short positions. Currently, long and short positions are almost evenly split, indicative of a lack of trader bias as to what direction EUR/USD takes next.

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.