EUR/USD continues to lose ground and has dropped below the 1.08 line in the Wednesday session. Currently, the pair is trading at 1.0790. On the release front, it’s another light day. The sole eurozone event is German Import Prices, which gained 0.7%. This beat the estimate of 0.4%. In the US, today’s highlight is Pending Home Sales, which is expected to rebound with a solid gain of 2.3%. On Thursday, Germany releases Preliminary CPI, while the US publishes Final GDP and unemployment claims.
March has been kind to the euro, which has gained 2.1% against the US dollar. The euro punched above the 1.09 level on Monday, its highest level since November 2016. The currency was bolstered by an excellent reading from German Ifo Business Climate in March, which rose to 112.3 points. This beat the estimate of 111.2 and marked its highest level since July 2011. The excellent release underscores high optimism in the business sector, despite rumblings of protectionism from the US and the uncertainty in Europe over the imminent Brexit negotiations. Stronger global demand has led to increased exports, notably German cars and machinery. Germany’s GDP expanded 1.6% in 2016, its highest rate since 2012. The economy has enjoyed a robust first quarter, and this has helped boost growth in the eurozone. Later this week, Germany releases key consumer and employment numbers, including CPI, retail sales and unemployment claims. Any unexpected readings could have a strong impact on the movement of EUR/USD.
President Donald Trump was on the wrong end of the rough-and tumble politics in Washington, as his bill to replace the Affordable Care Act was pulled before it even went to a vote. This was a humiliating setback for Trump, given that the Republicans enjoy a majority in Congress. The bruising defeat has sent the US dollar sharply lower and market jitters higher. Trump’s administration has stumbled out of the starting gate, and after more than two months in office, he has yet to provide any details over even an outline of economic policy. The inquiry into the Trump administration’s links with Russia is gathering steam, and is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but he has his work cut out, trying to convince a skeptical Congress and general public that he can deliver the goods and push his tax legislation through Congress.
Wednesday (March 29)
- 2:00 German Import Prices. Estimate 0.4%. Actual 0.7%
- 9:20 US FOMC Member Charles Evans Speech
- 10:00 US Pending Home Sales. Estimate 2.3%
- 10:30 US Crude Oil Inventories. Estimate 1.2M
Upcoming Key Events
Thursday (March 30)
- All Day – German Preliminary CPI. Estimate 0.4%
- 8:30 US Final GDP. Estimate 2.0%
- 8:30 US Unemployment Claims. Estimate 244K
*All release times are EST
*Key events are in bold
EUR/USD for Wednesday, March 29, 2017
EUR/USD March 29 at 5:40 EST
Open: 1.0816 High: 1.0826 Low: 1.0777 Close: 1.0788
EUR/USD was flat in the Asian session and has edged lower in European trade
- 1.0708 is providing support
- 1.0873 is the next resistance line
Further levels in both directions:
- Below: 1.0708, 1.0616 and 1.0506
- Above: 1.0873, 1.0985 and 1.1097
- Current range: 1.0708 to 1.0873
OANDA’s Open Positions Ratio
EUR/USD ratio is unchanged in the Wednesday session. Currently, short positions have a strong majority (62%), indicative of trader bias towards EUR/USD continuing to move lower.
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