EUR/USD – Euro Recovers After Drop Following Barcelona Attack

EUR/USD has edged higher in the Friday session, after losing ground on Thursday. Currently the pair is trading at 1.1742, up 0.20% on the day. On the release front, it’s a quiet end to the week. German PPI improved to 0.2%, beating the estimate of 0.0%. Euro zone current account disappointed, as the surplus narrowed to EUR 21.2 billion, well off the estimate of  EUR 27.3 billion. This marked the smallest current account surplus since July 2016. In the US, there was one key event, as UoM Consumer Sentiment improved to 97.6, beating the estimate of 94.0 points.

Geopolitical events continue to have a strong impact on the currency markets. Earlier in August, it was the crisis between the US and North Korea. On Thursday, it was yet another terror attack in Western Europe, this time in Barcelona, Spain. The car-ramming attack killed 12 and wounded dozens, and the euro responded with losses, as the currency touched 3-week lows. Investors are understandably on edge, but the euro has steadied on Friday, and things should return to normal next week, barring another attack in Western Europe. On the inflation front, there was positive news as German PPI improved to 0.2%, marking a 3-month high.

The euro remains at high levels, as growing political risk in the United States has weighed on the US dollar. President Trump’s administration continues to spend most of its focus and energy on damage control, and the latest fiasco for Trump has been the alt-right protest in Charlottesville, where one protester was killed by a suspected white supremacist. Trump’s belated condemnation of white supremacists and his insistence on blaming the violence on both the white supremacists and the counter-protesters has drawn wall-to-wall criticism from both Democrat and Republican lawmakers. Trump remains defiant and continues to attack his critics, but the events around Charlottesville have only served to tarnish his image and raised growing concerns about his presidency.

Geopolitics Weighs on Markets After Spain Attack

 

EUR/USD Fundamentals

Friday (August 18)

  • 2:00 German PPI. Estimate 0.0%. Actual 0.2%
  • 4:00 Euro zone Current Account. Estimate 27.3B. Actual 21.2B
  • 10:00 US Prelim. UoM Consumer Sentiment. Estimate 94.0. Actual 97.6
  • 10:00 US Prelim. UoM Inflation Expectations. Estimate 2.6%
  • 10:15 US FOMC Member Robert Kaplan Speaks

*All release times are GMT

*Key events are in bold

EUR/USD for Friday, August 18, 2017

EUR/USD Friday, August 18 at 11:00 EDT

Open: 1.1724 High: 1.1775 Low: 1.1708 Close: 1.1742

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1534 1.1616 1.1712 1.1876 1.1996 1.2108

EUR/USD edged higher in the Asian session. The pair has shown limited movement in the European and North American sessions

  • 1.1712 remains a weak line
  • 1.1876 is the next resistance line

Further levels in both directions:

  • Below: 1.1712, 1.1616 and 1.1534
  • Above: 1.1876, 1.1996, 1.2108 and 1.2221
  • Current range: 1.1712 to 1.1876

OANDA’s Open Positions Ratio

In the Friday session, EUR/USD ratio is showing long positions with a majority (65%), indicative of EUR/USD 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.