EUR/USD: Little Change As German CPI Steady

EUR/USD has started the trading week quietly, as the pair trades in the mid-1.36 range in Monday’s European session. On the release front, Eurozone CPI Flash Estimate was within expectations, but German Retail Sales posted a third straight decline. In the US, today’s highlight is Pending Home Sales, with the markets expecting a strong gain in the May reading.

Eurozone inflation levels have persistently been at low levels, so there was plenty of anticipation prior to the Eurozone CPI release on Monday. The key indicator didn’t cause a stir in the markets, posting a modest 0.5% gain, just short of the estimate of 0.6%. Core CPI Flash Estimate gained 0.8%, edging past the estimate of 0.7%. This follows German Preliminary CPI, which posted a gain of 0.3% after two straight declines. Meanwhile, German Retail Sales, the primary gauge of consumer spending, posted a decline of -0.6%, way off the estimate of +0.8%. This is the indicator’s third straight decline, and points to weak growth in the German economy, the largest in the Eurozone.

Last Friday, Ukraine signed an association agreement with the EU, which strengthens economic and political ties between Ukraine and the EU. Earlier in the year, the decision by the Ukrainian president not to sign the deal led to widespread demonstrations and the installation of a new government in Kiev. Predictably, Russia is upset about the trade deal and has warned about consequences if its economic interests are harmed as a result of the agreement. The situation remains tense in eastern Ukraine, and a flare-up in violence could rattle the markets and affect the euro.

 

EUR/USD for Monday, June 30, 2014

EUR/USD June 30 at 10:30 GMT

EUR/USD 1.3646 H: 1.3663 L: 1.3640

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3346 1.3487 1.3585 1.3651 1.3786 1.3893

 

  • EUR/USD was flat in the Asian session. The pair has edged higher in European trading.
  • 1.3585 is providing support. 1.3487 is stronger.
  • On the upside, 1.3651 is under strong pressure. There is stronger resistance at 1.3786.
  • Current range: 1.3585 to 1.3649

Further levels in both directions:

  • Below: 1.3585, 1.3487, 1.3346 and 1.3219
  • Above: 1.3651, 1.3786, 1.3893 and 1.40

 

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in short positions on Monday. This is not consistent with the movement of the pair, as the euro has posted very small gains. The ratio is showing a slight majority of short positions, indicative of a slight trader bias to the US dollar moving higher against the euro.

 

EUR/USD Fundamentals

  • 6:00 German Retail Sales. Estimate 0.8%. Actual -0.6%.
  • 8:00 Eurozone M3 Money Supply. Estimate 0.7%. Actual 1.0%.
  • 8:00 Eurozone Private Loans. Estimate -1.7%. Actual -2.0%.
  • 9:00 Eurozone CPI Flash Estimate. Estimate 0.6%. Actual 0.5%.
  • 9:00 Eurozone Core CPI Flash Estimate. Estimate 0.8%. Actual 0.7%.
  • 9:00 Italian Preliminary CPI. Estimate 0.2%. Actual 0.1%.
  • 13:45 US Chicago PMI. Estimate 63.2 points.
  • 14:00 US Pending Home Sales. Estimate 1.4%.

*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.