EUR/USD – Euro Steady as German GDP Beats Expectations

The euro remains listless, as EUR/USD trades in the mid-1.14 range on Friday. On the release front, German Preliminary GDP was strong, posting a strong gain of 0.7%. Eurozone GDP will be released later in the day, with a forecast of a 0.2% gain. In the US, today’s highlight is Preliminary UoM Consumer Sentiment. The markets are expecting a strong reading, with an estimate of 98.2 points.

There was good news out of Germany on Friday, as the Eurozone’s largest economy surprised the markets with a strong gain of 0.7%, beating the estimate of 0.3%. This was a sharp improvement over the Q4 German GDP reading of 0.1%. If Eurozone GDP beats expectations, the euro could gain some ground after an uneventful week.

In the US, retail sales and jobless numbers were dismal on Thursday. Core Retail Sales declined by 0.9%, while Retail Sales dropped by 0.8%. Both were well off their estimates of -0.4%. There was no relief from unemployment claims, which jumped to 304 thousand, compared to 284 thousand in the previous reading. The markets had expected a stronger reading of 282 thousand.

European finance ministers met in Brussels on Wednesday, but were unable to bridge the gap between Greece and its creditors. The bailout agreement expires at the end of February, and the next bailout payment of about EUR 7 billion is on hold as Greece has declared it will not abide by the austerity steps which are required to receive the funds. Greece is looking for bridge financing until a new deal can be reached, but Germany and the troika have balked at rewriting the agreement. The finance ministers will reconvene on Monday. If some agreement can be reached, the euro could get a boost.

EUR/USD for Friday, February 13, 2015

EUR/USD February 13 at 9:00 GMT

EUR/USD 1.1434 H: 1.1442 L: 1.1394

EUR/USD Technical

• EUR/USD posted slight gains in the Asian session, breaking above resistance at 1.1426. The pair is almost unchanged early in the European session.
• 1.1525 is an immediate resistance line.
• 1.1426 has switched to a support role and is a weak line. 1.1340 is stronger.
• Current range: 1.1426 to 1.1525

Further levels in both directions:

• Below: 1.1426, 1.1340, 1.1231, 1.1154, 1.1066 and 1.0909
• Above: 1.1525, 1.1634, 1.1754, 1.1802 and 1.1926

OANDA’s Open Positions Ratio

EUR/USD ratio is almost unchanged on Friday, continuing the trend we which has marked the ratio for most of the week. This is consistent with the lack of movement we are seeing from the pair on Friday. The ratio has a majority of short positions, indicative of trader bias towards the euro moving lower.

EUR/USD Fundamentals

• 6:30 French Preliminary GDP. Estimate 0.1%. Actual 0.1%.
• 7:00 German Preliminary GDP. Estimate 0.3%. Actual 0.7%.
• 7:00 German WPI. Estimate +0.4%. Actual -0.4%.
• 7:45 French Preliminary Nonfarm Payrolls. Estimate 0.0%. Actual -0.1%.
• 9:00 Italian Preliminary GDP. Estimate 0.0%.
• 10:00 Eurozone Flash GDP. Estimate 0.2%.
• 10:00 Eurozone Trade Balance. Estimate 21.3B.
• 13:30 US Import Prices. Estimate -3.1%.
• 15:00 US Preliminary UoM Consumer Sentiment. Estimate 98.2 points.
• 15:00 US Preliminary UoM Consumer 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.