EUR/ USD – Euro Pushes Higher as Markets Wait for Key US Releases

EUR/USD is moving higher in Friday’s European session. The pair has put some distance between itself and the pivotal 1.30 level, as it trades in the mid-1.30 range. On Friday, Brussels will  busy as it hosts the EU Economic Summit and the Eurogroup Finance Ministers. Eurozone inflation numbers matched the market forecast. In the US, there are a host of releases, including two key events – Core CPI and UoM Consumer Sentiment. The markets will  be hoping that US releases can wrap up a solid week with more good news.

For many months, US data has been mixed, making it difficult to accurately assess the extent of the US recovery. Sometimes, indicators in the same sector have pointed in different directions, which has been a source of frustration to analysts and market watchers. However, recent US numbers have looked very good, notably employment and retail sales data. No less important, positive indicators can be found in other sectors as well, as Import Prices, Business Inventories and Crude Oil Inventories all pointed upwards. The markets have reacted with a thumbs up, and this has helped the dollar post gains against the struggling euro. Has the US recovery entered a new phase? The markets will be hoping that the positive news continues, as the US releases UoM Consumer Sentiment and Core CPI to wrap up what has been an excellent week.

The Eurozone continues to limp along, and one of the most pressing matters is the political stalemate which has paralyzed Italy. The Italian Parliament meets on Friday and coalition talks are set to start next week. Most Italians oppose another election, but so far, the country’s political leaders have done little besides attack and insult each other. The financial markets remain skeptical, and Italy’s three-year borrowing costs rose to their highest since December at an auction earlier this week. This comes on the heels of a credit downgrade by Fitch, which lowered Italy’s credit rating by one notch last week. The third largest economy in the Eurozone is struggling with a massive debt of 1.9 trillion euros and weak growth, and needs to quickly get a government up and running as soon as possible.

 

EUR/USD for Friday, March 15, 2013

Forex Rate Graph 21/1/13
EUR/USD March 15 at 10:10 GMT

1.3003 H: 1.3066 L: 1.3058

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.2882 1.2950 1.300 1.3080 1.3130 1.3170

 

EUR/USD is flexing some muscle in the European session, and has climbed to the 1.3060 range. The pair is facing resistance at 1.3080. This line could be tested as the euro continues to climb. This is followed by resistance at 1.3130 level. On the upside, 1.2950 is the next support level. This line has strengthened as the pair trades at higher levels.

  • Current range: 1.300 to 1.3080

Further levels in both directions:

  • Below: 1.3000, 1.2950, 1.2882, 1.2802, 1.2757 and 1.2683
  • Above: 1.3080, 1.3130, 1.3170 and 1.3280

 

OANDA’s Open Position Ratios

The EUR/USD ratio is not showing any movement in Friday trading. This is not reflective of what we are seeing with the pair, as the euro is posting gains against the dollar. If the pair’s current upward movement continues, we can expect to see some increased activity in the ratio as well. The ratio continues to be close to an even split between open short and long positions, indicating that trader sentiment is closely divided as to what direction EUR/USD will take. 

After falling below the all-important 1.30 level earlier this week, EUR/USD has roared back in Friday trading, and is back in the mid-1.30 range. Will the euro be able to sustain this newly-found upward momentum? With the US scheduled to release key inflation and consumer confidence numbers later on Friday, we could see some volatility from the pair before the trading week wraps up.

 

EUR/USD Fundamentals

  • Day 2: EU Economic Summit
  • All Day: Eurogroup Meetings
  • 10:00 Eurozone CPI. Estimate 1.8%
  • 10:00 Eurozone Core CPI. Estimate 1.3%
  • 12:30 US Core CPI. Estimate 0.2%
  • 12:30 US CPI. Estimate 0.2%
  • 12:30 US Empire State Manufacturing Index. Estimate. 9.8 points.
  • 13:00 US TIC Long-Term Purchases. Estimate 39.3B
  • 13:15 US Capacity Utilization Rate. Estimate 79.4%
  • 13:15 US Industrial Production. Estimate 0.4%
  • 13:55 US Preliminary UoM Consumer Sentiment. Estimate 78.2 points
  • 13:55 US Preliminary UoM Inflation Expectations

 

*Key releases are highlighted in bold

*All release times are GMT

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.