EUR/USD – Euro Stable After Dismal Week

EUR/USD is steady on Monday, as the pair tries to find its footing following last week’s slide of about 170 points. EUR/USD is trading in the high 1.27 range, its lowest level since September 2012. On the release front, Germany releases Preliminary CPI, a key release. The markets are keeping their expectations low, with an estimate of -0.1%. In the US, today’s highlight is Pending Home Sales. After a sharp gain of 3.3% in July, the markets are braced for a sharp downturn, with an estimate of -0.4%.

Friday’s German releases underscored that the Eurozone’s largest economy is in trouble. GfK Consumer Climate dipped to 8.3 points, its lowest level in 2014. Import Prices posted a second straight decline, coming in at -0.1%. This followed Ifo German Business Climate, which weakened for a fifth straight month. The sputtering Eurozone is dependent on the German locomotive to pull the region’s economy back on track, and the shaky euro will have difficulty stabilizing if German data does not improve.

On Thursday, the euro lost ground after ECB head Mario Draghi spoke in Lithuania. Draghi reiterated that the ECB stood prepared to implement additional unconventional steps if prolonged low inflation levels did not rise. Draghi acknowledged that summer economic data was weaker than expected, but said the central bank forecast modest growth in the Eurozone in Q3 and Q4. Lithuania is set to join the Eurozone in January and will become the 19th member of the Euro region.

In the US, Core Durable Goods Orders posted a strong gain of +0.7%, bouncing back from the previous reading of -0.8%. Durable Goods Orders continues to take its riders on a roller coaster ride, plunging 18.2% in August, compared to a huge gain of 22.6% a month earlier. Unemployment Claims rose to 293 thousand, within expectations.

EUR/USD for Monday, September 29, 2014

EUR/USD September 29 at 9:30 GMT

EUR/USD 1.2675 H: 1.2698 L: 1.2664

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.2286 1.2407 1.2518 1.2688 1.2806 1.2905

 

  • EUR/USD broke above resistance at 1.2688 late in the Asian session but has since retracted. The pair is steady in European trade.
  • 1.2518 is a strong support level.
  • 1.2688 is a weak resistance line. 1.2806 is stronger.
  • Current range: 1.2518 to 1.2688

Further levels in both directions:

  • Below: 1.2518, 1.2407, 1.2286 and 1.2144
  • Above: 1.2688, 1.2806, 1.2905, 1.2984 and 1.3104

 

OANDA’s Open Positions Ratio

EUR/USD ratio has a majority of long positions, indicative of trader bias towards the euro breaking out and moving upwards.

EUR/USD Fundamentals

  • All Day – German Preliminary CPI. Estimate -0.1%
  • 7:00 Spanish Flash CPI. Estimate -0.3%. Actual -0.2%.
  • 9:21 Italian 10-year Bond Auction.
  • 12:30 US Core PCE Price Index. Estimate 0.0%.
  • 12:30 US Personal Spending. Estimate 0.5%.
  • 12:30 US Personal Income. Estimate 0.3%.
  • 14:00 US Pending Home Sales. Estimate -0.4%.

*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.