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EUR/USD – Euro Dips Below 1.37 As Markets Eye Fed Minutes

After a slow start to the week, EUR/USD has posted losses on Tuesday. In the European session, the  pair is trading below the 1.37 level. On the release front, German PPI continues to look weak, posting its third decline in four tries. It’s another quiet day in the US, with no economic releases on Tuesday. The markets are keeping a close eye on the Federal Reserve minutes, which will be released on Wednesday.

Eurozone inflation indicators continue to look weak, and this was reinforced on Tuesday as German PPI came in at -0.1%, short of the estimate of 0.0%. The ECB has tried to downplay concerns over lack of inflation, but when Mario Drahgi acknowledged that the central bank could take action in June, the euro responded with sharp losses. Eurozone growth numbers also disappointed in April. Eurozone Flash GDP dipped to 0.2%, short of the estimate of 0.3%, while French and Italian GDP releases both weakened and missed expectations. On a bright note, German Preliminary GDP, which jumped 0.8% in Q1, its best showing since Q1 in 2013. This edged above the estimate of 0.7%.

In the US, last week ended with encouraging housing numbers. Building Permits jumped to 1.08 million, well above the estimate of 1.01 million. This was the highest level we’ve seen since December 2006. Housing Starts continues to move higher and climbed to 1.07M, compared to the estimate of 0.98M. This marked a five-month high. Meanwhile, UoM Consumer Sentiment dipped to 81.8 points, short of the estimate of 84.7 points.


EUR/USD for Tuesday, May 20, 2014

Forex Rate Graph 21/1/13

EUR/USD May 20 at 9:25 GMT

EUR/USD 1.3687 H: 1.3713 L: 1.3679


EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3487 1.3585 1.3649 1.3786 1.3893 1.4000


Further levels in both directions:


OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in short positions in Tuesday trading. This is consistent with the movement we are seeing from the pair, as the euro has lost ground. The ratio runs slightly in favor of long positions, indicative of a slight trader bias towards the euro reversing direction and moving higher.

EUR/USD has dropped below the 1.37 line on Tuesday. The pair is unchanged in the European 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]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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