EUR/USD – Euro Drifting at 1.13

EUR/USD is flat on Monday, continuing the lack of movement which has marked the pair since late last week. With no major releases out of the Eurozone or the US, it could remain an uneventful day for the pair. In the European session, EUR/USD is trading at the 1.13 line. On the release front, the sole Eurozone event is the German central bank’s monthly report. The US will release the NAHB Housing Market Index, with little change expected. As well, New York Fed president William Dudley will deliver remarks at a meeting in New York. Tuesday will be busier, with Germany and the Eurozone releasing the ZEW Economic Sentiment reports. In the US, there is one key event, Building Permits.

With the Eurozone economy having a tough time battling low inflation levels, the worry of deflation is constantly a concern for policymakers. Last week, there were some positive inflation numbers from from the two largest economies in the bloc, Germany and France. Eurozone Final CPI also improved in March, but only to a flat level of 0.0% Inflation remains well below the ECB target of about 2.0%, despite significant monetary moves by the central bank in March, such as cutting interest rates and expanding the ECB asset-purchase program. In March, Mario Draghi stated that the ECB would not lower interest rates anytime soon, which would leave the ECB with limited monetary options. The ECB holds a policy meeting on April 21. Even if the ECB remains on the sidelines, the markets will be giving ECB head Mario Draghi their full attention, as his comments following the ECB statement can quickly inject volatility into the currency markets.

The US economy continues to perform well, despite some weak sectors, such as the manufacturing industry. US manufacturers continue to face stiff competition with countries that pay much lower wages, such as China, India, and other Asian countries. With turbulent global economic conditions leading to weaker demand, the manufacturing sector is facing additional challenges. There was some positive news on Friday, as the Empire State Manufacturing Index climbed 9.6 points in April, crushing the estimate of 2.1 points. It was the indicator’s highest level since January 2015. We’ll get a look at the Philly Fed Manufacturing Index, a key manufacturing report, on Thursday.

EUR/USD Fundamentals

Monday (April 18)

• 10:00 German Buba Monthly Report
• 12:30 US FOMC Member William Dudley Speaks
• 14:00 US NAHB Housing Market Index. Estimate 59 points

Upcoming Key Events

Tuesday (April 19)

• 9:00 German ZEW Economic Sentiment. Estimate 8.2 points
• 12:30 US Building Permits. Estimate 1.20M

*Key events are in bold

*All release times are GMT

EUR/USD for Monday, April 18, 2016

EUR/USD April 18 at 8:45 GMT

Open: 1.1297 Low: 1.1273 High: 1.1309 Close: 1.1293

EUR/USD Technical

• EUR/USD has been flat in the Asian and European sessions
• There is resistance at 1.1378
• 1.1278 remains fluid and is currently a weak support line

Further levels in both directions:

• Below: 1.1278, 1.1172, 1.1087 and 1.0989
• Above: 1.1378, 1.1495 and 1.1609
• Current range: 1.1172 to 1.1278

OANDA’s Open Positions Ratio

EUR/USD ratio remains unchanged at the start of the week. Short positions continue to command a strong majority (60%). This is indicative of strong trader bias towards EUR/USD breaking out and moving to lower levels.

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.