EUR/USD – Euro Gains After Yellen Comments

EUR/USD remains at high levels on Thursday, as the pair trades in the mid-1.38 range in the European session. The dollar is broadly lower following comments by Fed chair Janet Yellen on Wednesday. In the Eurozone there is just one release. German PPI posted a small decline, as Eurozone inflation remains at low levels. In the US, the markets are keeping an eye on two key events – Unemployment Claims and the Philly Fed Manufacturing Index.

The euro remains firm following comments by Federal Reserve chair Janet Yellen on Wednesday. Yellen said there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

Tensions between East and West continue over the volatile situation in Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart are meeting on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we could see some market movement as the crisis continues.

 

EUR/USD for Thursday, April 17, 2014

Forex Rate Graph 21/1/13

EUR/USD April 17 at 12:15 GMT

EUR/USD 1.3858 H: 1.3864 L: 1.3822

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3585 1.3649 1.3786 1.3893 1.4000 1.4149

 

  • EUR/USD showed little movement in the Asian session, staying just above the 1.3830 line. The pair has posted modest gains in the European session.
  • 1.3786 is providing support.
  • 1.3893 continues to provide resistance, but this line has weakened as the euro moves higher. The next resistance line is at the key level of 1.40.
  • Current range: 1.3786 to 1.3893

Further levels in both directions:

  • Below: 1.3786, 1.3649, 1.3585, 1.3410 and 1.3335
  • Above: 1.3893, 1.4000, 1.4149 and 1.4307

 

OANDA’s Open Positions Ratio

EUR/USD ratio are made up of a majority of short positions, indicative of trader bias towards the dollar reversing its current direction and moving higher.

EUR/USD continues to post gains on Thursday. The pair is steady in the European session.

 

EUR/USD Fundamentals

  • 6:00 German PPI. Estimate +0.1%. Actual -0.3%.
  • 12:30 US Unemployment Claims. Estimate 316K.
  • 14:00 US Philly Fed Manufacturing Index. Estimate 9.6 points. 
  • 14:30 US Natural Gas Storage. Estimate 35B.

*Key releases are highlighted in bold

*All release times are GMT

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.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.