EUR/USD – Euro Yawns as German GDP Meets Expectations

EUR/USD is almost unchanged on Tuesday, as the pair trades at 1.0630. On the release front, German Preliminary GDP improved to 0.4%, close the forecast of 0.5%. However, German ZEW Economic Sentiment dropped to 10.4 points, well below the estimate of  15.1 points. Eurozone Flash GDP came in at 0.4%, short of the forecast of 0.5%. Later in the day, the US releases PPI and Janet Yellen will testify before Congress. On Wednesday, the US releases retail sales and CPI reports, and Yellen will continue her testimony before the US Senate.

The Eurozone has been showing signs of recovery, as growth and inflation numbers are higher. This is good news for the ECB, which can now focus on tightening monetary policy. If the ECB feels that the economy will continue to march in the right direction, the bank could taper its asset-purchase program or raise interest rates. ECB head Mario Draghi will likely remain cautious, with Brexit and elections in France and Germany high on the agenda. Still, if the eurozone economy continues to grow and inflation levels move higher, we could see the ECB change its monetary stance later in the year.

Will Donald Trump break radio silence and provide details about his economic stance? Trump has promised to cut taxes and spend big on infrastructure structures, but he has not released any details in this regard, much to the consternation of the markets. Last week, Trump said that the administration was working on a “phenomenal” tax plan, which would be released in a few weeks, although he gave no details. Trump’s plan is expected to lower taxes for both corporations and individuals, although tax reform promises to be a slow and daunting task. The markets are looking for some details regarding Trump’s plans for the US economy, and if Trump’s plan to reform the US tax code seems feasible, the markets could rally and push the US dollar to higher levels.

EUR/USD Fundamentals

Tuesday (February 14)

  • 7:00 German Preliminary GDP. Estimate 0.5%. Actual 0.4%
  • 10:00 Eurozone Flash GDP. Estimate -0.6%
  • 10:00 German ZEW Economic Sentiment. Estimate 15.1. Actual 10.4
  • 13:30 US PPI. Estimate 0.3%
  • 15:00 US Fed Chair Janet Yellen Speech

*All release times are EST

*Key events are in bold

EUR/USD for Tuesday, February 14, 2017

EUR/USD February 14 at 6:55 EST

Open: 1.0598 High: 1.0633 Low: 1.0591 Close: 1.0626

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0414 1.0506 1.0616 1.0708 1.0873 1.0985

EUR/USD was edged up the Asian session. The pair has shown choppiness in European trade but is unchanged

  • 1.0616 is under pressure in support
  • 1.0708 is the next resistance line

Further levels in both directions:

  • Below: 1.0616, 1.0506 and 1.0414
  • Above: 1.0708, 1.0873, 1.0985 and 1.1114
  • Current range: 1.0616 to 1.0708

OANDA’s Open Positions Ratio

EUR/USD ratio is showing little movement in the Tuesday session. Currently, long positions have a slight majority (53%), indicative of slight trader bias towards the euro continuing to move higher.

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.