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EUR/USD – Euro Gains After Solid German Consumer Climate

The euro continues to post gains in Wednesday trading, as the pair trades at the 1.36 line in the European session. In economic news, US releases were mixed on Tuesday, as Building Permits looked sharp, breaking above the 1 million mark. However, Consumer Confidence was a disappointment, slipping to a seven-month low. On Wednesday, German Consumer Climate looked sharp, posting a multi-year high for October. In the US, there are a host of releases, highlighted by Core Durable Goods Orders and Unemployment Claims.

There was more good news out of Germany on Wednesday, as Consumer Climate continues to point upwards. The key indicator climbed to 7.4 points in October, up from 7.0 points the month before. This strong reading was a multi-year high and beat the estimate of 7.1 points. We’ll get another look at German data on Thursday, with the release of Preliminary CPI and Unemployment Change. Meanwhile, German Chancellor Angela Merkel’s CDU party has reached an agreement with the Social Democrats to form a coalition, two months after her victory in national elections. This will be her third term in office. Merkel has been opposed to joint liability for Eurozone members in debt, and this policy will likely continue under the new government.

In the US, Building Permits pushed over the 1 million mark, hitting 1.03 million units. This was the highest level since June 2008 and beat the estimate of 0.94 million. The September release, which had been postponed due to the government shutdown last month, came in at 0.97 million, above the estimate of 0.94 million. These solid numbers come on the heels of Pending Home Sales, which looked sluggish after posting a fifth straight decline. Meanwhile, CB Consumer Confidence slipped, dropping to 70.4 points from 71.2 the month before. This fell short of the estimate of the 72.2 points.

We’ve heard plenty about the lack of inflation and growth in the Eurozone, and the ECB is considering further monetary action to shake the economy out of its slumber. Despite all this, the euro continues to look sharp, and has gained about 250 points against the US dollar in the last two weeks. However, the euro still is well below the levels we saw in late October, when EUR/USD was trading around 1.38.

 

EUR/USD for Wednesday, November 27, 2013

Forex Rate Graph 21/1/13

EUR/USD November 27 at 12:20 GMT

EUR/USD 1.3595 H: 1.3613 L: 1.3558

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3410 1.3500 1.3585 1.3649 1.3786 1.3893

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

EUR/USD ratio remains unchanged in Wednesday trading. This is not reflected in the pair’s movement, as the pair is showing little movement. A large majority of the open positions remain short, indicative of a trader bias towards the dollar posting gains against the euro.

The pair has posted slight gains and is close to the 1.36 line. With the US Unemployment Claims and key manufacturing numbers later on Wednesday, we could see some movement from the pair during the North American session.

 

EUR/USD Fundamentals

 

*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 [4]

Currency Analyst at Market Pulse [5]
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.
Kenny Fisher

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