EUR/USD – Euro Edges Lower as Investors Look for Catalyst

The euro has started losses in the Monday session. Currently, EUR/USD is trading at 1.1745, down 0.30% on the day. On the release front, we’ll get a look at Eurozone Consumer Confidence, which is expected to remain to remain at -1 point.  There are no US events on the schedule. On Tuesday, Germany and the eurozone will release Manufacturing PMIs.

The standoff in Catalonia has continued this week. On Saturday, the central government said it was imposing direct rule, invoking Article 155 of the Spanish Constitution. However, there is plenty of uncertainty, as this clause has never been used and it is unclear what steps Madrid will take. Spanish media is reporting that the central government will strip Catalan President Carles Puigdemont of all his powers and take over Catalonia’s local police force. Unsurprisingly, the Catalan government has condemned Madrid and said it will not accept direct rule. The crisis has led to many companies in Catalonia moving their legal headquarters to Madrid, and investors are nervously watching as developments unfold in Spain, which is the eurozone’s fourth largest economy.

Spain on Edge, EURO lower

The Brexit clock is ticking, with Britain leaving the European Union in March 2019. However, negotiations between the parties have foundered, as the sides remain far apart on a number of key issues, including the size of Britain’s bill when it says goodbye to the club. Prime Minister May addressed the 27 EU leaders last week in Brussels, imploring the European to show some flexibility. This didn’t prevent the EU leaders from stating that trade negotiations with Britain would not commence until more progress was made on non-trade matters. Prime Minister May has a razor-thin majority in parliament, and adding to the mix, there are sharp divisions in her cabinet regarding Brexit, with some senior ministers in favor of taking a hard stance and leaving the EU without an agreement if the Europeans fail to soften their position.

EUR/USD Fundamentals

Monday (October 23)

  • 6:00 German Buba Monthly Report
  • 10:00 Eurozone Consumer Confidence. Estimate -1

Tuesday (October 24)

  • 3:00 French Flash Manufacturing PMI. Estimate 56.2
  • 3:00 French Flash Services PMI. Estimate 57.0
  • 3:30 German Flash Manufacturing PMI. Estimate 60.1
  • 3:30 German Flash Services PMI. Estimate 55.5
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 57.9
  • 4:00 Eurozone Flash Services PMI. Estimate 55.7

*All release times are GMT

*Key events are in bold

EUR/USD for Monday, October 23, 2017

EUR/USD Monday, October 23 at 5:30 EDT

Open: 1.1782 High: 1.1782 Low: 1.1740 Close: 1.1747

 

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1489 1.1611 1.1712 1.1876 1.1996 1.2092

EUR/USD edged lower in the Asian session but bounced back. In European trade, the pair has recorded slight losses

  • 1.1712 is providing support
  • 1.1876 is the next resistance line

Further levels in both directions:

  • Below: 1.1712, 1.1611, 1.1489 and 1.1366
  • Above: 1.1876, 1.1996 and 1.2018
  • Current range: 1.1712 to 1.1876

OANDA’s Open Positions Ratio

EUR/USD is unchanged in the Monday session. Currently, short positions have a majority (64%), indicative of EUR/USD continuing to move to lower ground.

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.