EUR/USD – Euro Climbs after Yellen Speech

EUR/USD has posted considerable gains in the Friday session. Currently the pair is trading at 1.1877, up 0.67% on the day. On the release front, German Final GDP gained 0.6%, matching the estimate. German Ifo Business Climate ticked lower to 115.9, beating the forecast of 115.5 points. In the US, durable goods reports were mixed. Core Durable Goods Orders improved to 0.5%, edging above the estimate of 0.4%. However, Durable Goods Orders declined 6.8%, weaker than the estimate of -6.0%. At the Jackson Hole meeting of central bankers, Janet Yellen has concluded her speech, and ECB President Mario Draghi will follow later today. The euro gained ground after Yellen’s speech, and traders should be prepared for some volatility after Draghi’s remarks.

It’s Day 2 of the Jackson Hole Symposium, and the markets heard from Janet Yellen earlier in the day. Yellen opted not to discuss US monetary policy, which was not a major surprise, but still disappointed the markets nonetheless, and the euro responded with strong gains. Yellen instead chose to discuss financial reforms, saying that measures put in place in 2007 and 2009 had been effective, adding that future reforms should remain modest. Her comments come at a time when President Trump is looking into wide-ranging reforms in the finance industry. Trump has complained that the financial sector is over-regulated and is hampering businesses.

The Fed has not provided much guidance in recent weeks as to its plans regarding interest rates, and Janet Yellen did not address the issue in her speech at Jackson Hole. A December rate hike remains on the table, but the Fed policymakers have sounded lukewarm about another hike in 2017, and the odds of a rate hike in December remain below 50%. One of the principal impediments to rate hike is inflation, which remains at stubbornly low levels. This, despite solid economic growth and a labor market that is close to capacity.

Fed Chair Defends US Financial Rules at Jackson Hole

EUR/USD Fundamentals

Friday (August 25)

  • 2:00 German Final GDP. Estimate 0.6%. Actual 0.6%
  • 2:00 German Import Prices. Actual -0.4%
  • 4:00 German Ifo Business Climate. Estimate 115.5. Actual 115.9
  • 8:30 US Core Durable Goods Orders. Estimate 0.4%. Actual 0.5%
  • 8:30 US Durable Goods Orders. Estimate -6.0%. Actual -6.8%
  • 10:00 US Fed Chair Janet Yellen Speaks
  • 3:00 ECB President Mario Draghi Speaks
  • All Day – Jackson Hole Symposium (Day 2)

*All release times are GMT

*Key events are in bold

 

EUR/USD for Friday, August 25, 2017

EUR/USD Friday, August 25 at 11:15 EDT

Open: 1.1800 High: 1.1884 Low: 1.1773 Close: 1.1867

 

EUR/USD Technical

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

EUR/USD showed little movement in the Asian session. The pair was choppy in the European session and has posted considerable gains in North American trade

  • 1.1712 is providing support
  • 1.1876 is under pressure as EUR/USD has posted gains in the North American session

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 (66%). This is 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.