EUR/USD – Stable as Markets Await US CPI Data

EUR/USD has posted slight losses on Wednesday, as the pair has dropped below the 1.27 line in the European session. The euro remains under pressure, having lost over 100 points since early Tuesday. On the release front, there are no major Eurozone releases on the schedule. In the US, today’s highlights are Core CPI and CPI. The markets are keeping expectations low for the September readings.

Despite the efforts of the ECB, inflation levels in the Eurozone remain anemic, as German PPI came in at a flat 0.0%, shy of the estimate of 0.1%. The indicator has not produced a gain since December, as Germany continues to struggle with a lack of inflation. Eurozone Current Account, which is closely linked to currency demand, posted a surplus of EUR 18.9 billion, little changed from the previous release of EUR 18.7 billion. This reading disappointed the markets, as the estimate stood at EUR 21.3 billion.

The Deutsche Bundesbank issued its monthly report on Monday. The German central bank said that the economy showed little growth in the third quarter, as manufacturing production fell and business confidence weakened. At the same time, employment numbers and consumer spending were higher, so GDP was likely to remain unchanged. As for Q4, the report stated that the outlook is “moderate”. The report underscores weakness in the German economy, long considered the locomotive of Europe. The euro is sensitive to German data, so weak German numbers could hurt the shaky euro.

EUR/USD for Wednesday, October 22, 2014

EUR/USD October 22 at 10:15 GMT

EUR/USD 1.2692 H: 1.2740 L: 1.2681

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.2407 1.2518 1.2688 1.2806 1.2905 1.2984

 

  • EUR/USD was uneventful in the Asian session. The pair has lost ground in European trade and is putting strong pressure on support at 1.2688. Will the pair break through this line?
  • 1.2688 is under strong pressure as the euro has posted modest losses. 1.2518 is stronger.
  • On the upside, 1.2806 has strengthened.
  • Current range: 1.2688 to 1.2806

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in long positions on Wednesday. This is not consistent with the pair’s movement, as the euro has posted slight losses. The ratio has a majority of long positions, indicative of trader bias towards the euro moving higher.

 

EUR/USD Fundamentals

  • 9:37 German 30-year Bond Auction. Actual 1.77%.
  • 12:30 US CPI. Estimate 0.0%.
  • 12:30 US Core CPI. Estimate 0.2%.
  • 14:30 US Crude Oil Inventories. Estimate 2.8M.

*All release times are GMT

*Key releases are highlighted in bold.

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.