EUR/USD has lost ground on Wednesday, paring the strong gains which marked the Tuesday session. Currently, the pair is trading at the 1.0760. On the release front, there are no major economic indicators out of Europe or the US. In the eurozone, January’s current account surplus slipped to EUR 24.1 billion, well off the forecast of EUR 29.3 billion. This marked the lowest surplus since July 2016. In the US, today’ highlight is Existing Home Sales, which is forecast to drop to 5.59 million. On Thursday, the US releases Unemployment Claims, and Fed Chair Janet Yellen will speak at an event in Washington, D.C.
With a lack of key fundamentals this week, the markets are focusing on comments from FOMC members who will be speaking this week, including Fed Chair Janet Yellen on Thursday. On Monday, Chicago Fed President Charles Evans said he expects the Fed to raise rates two more times this year. This echoes the Fed’s dot point plot as well as last week’s rate statement. Although three rate hikes in 2017 would be no mean feat, the markets would like four hikes, given the strong performance of the US economy. The Fed’s cautious approach disappointed the markets, as the US dollar has posted broad losses since last week. The euro has taken full advantage, as EUR/USD punched above the 1.08 line on Tuesday and hit 7-week highs.
In the Netherlands, Prime Minister Mark Rutte comfortably won last week’s election, defeating far-right candidate Geert Wilders, a euro-sceptic. Next stop on the election train is France, which holds presidential elections next month. Polls have far rightist Marine Le Pen and centrist Emmanuel Macron running neck-and-neck in the first round of the presidential election on April 23. Still, Macron is expected to win in the second-round vote in May. In a highly-anticipated television debate on Monday, Macron and Le Pen had a chance to hawk their wares, and a survey found that Macron won the debate. Le Pen, leader of the far-right, has pledged to take France out of the eurozone and hold a referendum on EU membership. Macron’s strong showing in the debate has improved market sentiment and helped boost the euro on Tuesday. France boasts the number two economy in the eurozone, so we can expect more volatility from the euro as we get closer to Election Day.
Wednesday (March 22)
- 5:00 Eurozone Current Account. Estimate 29.3B. Actual 24.1B
- Tentative – German 10-y Bond Auction
- 9:00 US HPI. Estimate 0.4%
- 10:00 US Existing Home Sales. Estimate 5.59M
- 10:30 US Crude Oil Inventories. Estimate 1.9M
Upcoming Key Events
Thursday (March 23)
- 8:30 US Unemployment Claims. Estimate 240K
- 8:45 US Fed Chair Janet Yellen Speech
*All release times are EST
*Key events are in bold
EUR/USD for Wednesday, March 22, 2017
EUR/USD March 22 at 6:00 EST
Open: 1.0812 High: 1.0818 Low: 1.0776 Close: 1.0762
EUR/USD was flat in the Asian session and has edged lower in European trade
- 1.0708 is providing support
- 1.0873 is the next resistance line
Further levels in both directions:
- Below: 1.0708, 1.0616 and 1.0506
- Above: 1.0873, 1.0985 and 1.1097
- Current range: 1.0708 to 1.0873
OANDA’s Open Positions Ratio
EUR/USD ratio is showing little movement in the Wednesday session. Currently, short positions have a majority (63%), indicative of trader bias towards EUR/USD reversing directions and moving lower.
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.