EUR/USD has posted slight losses on Tuesday, as the pair pushed into 1.28 territory but was unable to consolidate. It’s a very quiet day on the release front, with no Eurozone events. In the US, today’s sole release is Existing Home Sales. The markets are expecting the indicator to improve in the September release.
The markets were greeted with lukewarm Eurozone data on Monday morning. Inflation remains anemic, as German PPI came in at a flat 0.0%, shy of the estimate of 0.1%. The indicator has not produced a gain since December, as Germany continues to struggle with a lack of inflation. Eurozone Current Account, which is closely linked to currency demand, posted a surplus of EUR 18.9 billion, little changed from the previous release of EUR 18.7 billion. This reading disappointed the markets, as the estimate stood at EUR 21.3 billion.
The Deutsche Bundesbank issued its monthly report on Monday. The German central bank said that the economy showed little growth in Q3 as manufacturing production fell and business confidence weakened. At the same time, employment numbers and consumer spending were higher, so GDP was likely to remain unchanged. As for Q4, the report stated that the outlook is “moderate”. The report underscores weakness in the German economy, long considered the locomotive of Europe. Weak German data could hurt the shaky euro.
US releases wrapped up the week on a high note, as UoM Consumer Sentiment climbed to 86.4 points, its highest reading since July 2007. The markets had expected a reading of 84.3 points. This indicates that the US consumer remains optimistic about the economy and is not overly concerned about warnings of a global slowdown. On the housing front, Building Permits and Housing Starts met expectations. Strong US employment numbers continue to drive the US recovery, as US job claims dropped to 264 thousand, marking a 14 -year low. The estimate stood at 286 thousand.
EUR/USD for Tuesday, October 21, 2014
EUR/USD October 21 at 9:20 GMT
EUR/USD 1.2762 H: 1.2840 L: 1.2758
- EUR/USD edged higher in the Asian session, breaking above resistance of 1.2806. The pair has reversed directions in European trading and posted losses.
- 1.2688 is providing support.
- On the upside, 1.2806 was breached but recovered. 1.2905 is stronger.
- Current range: 1.2688 to 1.2806
Further levels in both directions:
- Below: 1.2688, 1.2518, 1.2407 and 1.2286
- Above: 1.2806, 1.2905, 1.2984 and 1.3104
OANDA’s Open Positions Ratio
EUR/USD ratio is pointing to gains in short positions on Tuesday. This is consistent with the pair’s movement, as the euro has posted losses. The ratio has a majority of long positions, indicative of trader bias towards the euro reversing directions and moving higher.
- 14:00 US Existing Home Sales. Estimate 5.11M.
*All release times are GMT
*Key releases are highlighted in bold.