EUR/USD is listless on Wednesday, as the pair trades in the mid-1.35 range, as it has for most of the week. On the release front, today’s highlight is the Federal Reserve Policy Statement. In the Eurozone, the sole event on the schedule is the German 10-year Bond Auction.
All eyes are on the Federal Reserve on Wednesday, as the US central bank will release a policy statement later in the day. The Fed is expected to trim its QE program by another $10 billion, which would reduce the asset purchase scheme to $35 billion/month. The big question is when the Fed will raise interest rates, but Fed chair Janet Yellen is unlikely to shed much light on that issue. If, as expected, QE is wound up in 2014, we could see a rate hike in the first half of 2015. However, cuts to QE are dependent on the health of the US economy, which continues to move in the right direction, despite some bumps in the road.
The news out of the US was mixed on Tuesday. Building Permits dropped to 0.99M, well below the estimate of 1.07M. On the inflation front, CPI moved up modestly, posting a gain of 0.3%. This was the strongest gain we’ve seen since January 2013. CPI followed suit, climbing to an eleven-month high. The index rose to 0.4%, beating the estimate of 0.2%.
German ZEW Economic Sentiment, a well-respected indicator, continues to lose ground throughout 2014. The index weakened to 29.8 points, well off the estimate of 35.2 points. This was the worst reading we’ve seen since November 2012. Eurozone ZEW Economic Sentiment improved in May, climbing to 58.4 points. However, this fell short of the estimate of 59.6. Despite the dismal German release, the euro is holding its own against the US dollar.
EUR/USD for Wednesday, June 18, 2014
EUR/USD June 18 at 9:15 GMT
EUR/USD 1.3561 H: 1.3563 L: 1.3542
EUR/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.3219 | 1.3346 | 1.3487 | 1.3585 | 1.3649 | 1.3786 |
- EUR/USD is flat in Wednesday trade.
- 1.3487 continues to provide support.
- 1.3585 is a weak resistance line and saw action earlier in the day. There is stronger resistance at 1.3649.
- Current range: 1.3487 to 1.3585
Further levels in both directions:
- Below: 1.3487, 1.3346, 1.3219 and 1.3102
- Above: 1.3585, 1.3649, 1.3786, 1.3893 and 1.4000
OANDA’s Open Positions Ratio
EUR/USD ratio is almost unchanged on Wednesday. This is not consistent with the movement of the pair, as the euro has posted slight gains. The ratio has a majority of long positions, indicative of trader bias towards the euro improving against the dollar.
EUR/USD is trading quietly on Wednesday. The pair has posted slight gains in the European session.
EUR/USD Fundamentals
- Tentative – German 10-year Bond Auction.
- 12:30 US Current Account. Estimate -96B.
- 14:30 US Crude Oil Inventories. Estimate -0.6M.
- 18:00 US FOMC Economic Projections.
- 18:00 US FOMC Statement.
- 18:00 US Federal Fund Rate. Estimate <0.25%.
- 18:30 US FOMC Press Conference.
*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