The euro has edged higher in the Tuesday session, as EUR/USD is currently trading at 1.1250. In economic news, it’s a very busy day in the Eurozone. German Final GDP posted a gain of 0.6%, matching the forecast. There was positive news from the manufacturing sector, as German and Eurozone Manufacturing PMIs beat their estimates. German Ifo Business Climate rose to 114.6, easily beating the estimate of 113.1 points. In the US, today’s highlight is US New Home Sales, which is expected to drop to 611 thousand.
German numbers continue to impress, and a strong German economy has helped lift up the eurozone economy, which hasn’t looked this strong in years. German Final GDP for the first quarter remained at 0.6%, unchanged from the Preliminary GDP reading. The Ifo Business Climate report sparkled, climbing to 114.6, marking its highest level since 1991. As well, the manufacturing sector continues to expand, as German Manufacturing PMI improved to 59.4, its highest reading since February 2011. Exports and manufacturing propelled the economy in the first quarter, and these sectors should remain strong, so we can expect strong economic expansion in the second quarter as well. Eurozone numbers are likewise pointing to expansion, as reflected in the manufacturing sector. Eurozone Manufacturing PMI also impressed at 57.0, the ninth straight month that is has improved.
EU finance ministers met on Monday, and a key issue was debt relief for Greece. However, the ministers could not reach an agreement, and opted to try and hammer out an agreement at the June meeting. The uncertainty caused by the delay will only exacerbate concerns about the fragile Greek economy. Greece has undergone a severe austerity plan and understandably, the Greek government is reluctant to adopt further painful measures. However, Greece could be headed on a collision course with the EU, if the latter insists that the further reforms are needed. German Finance Minister Wolfgang Schaeuble praised the reforms implemented by Greece as “remarkable”, but insisted that Greece must take further steps before the EU provides further financial aid. Greek’s debt woes once resulted in the country almost leaving the eurozone, and if the EU holds up aid, the euro could lose ground.
Tuesday (May 23)
- 3:30 German Final GDP. Estimate 0.6%. Actual 0.6%
- 3:00 French Flash Manufacturing PMI. Estimate 55.2. Actual 54.0
- 3:00 French Flash Services PMI. Estimate 56.8. Actual 58.0
- 3:30 German Flash Manufacturing PMI. Estimate 58.0. Actual 59.4
- 3:30 German Flash Services PMI. Estimate 55.5. Actual 55.2
- 4:00 German Ifo Business Climate. Estimate 113.1. Actual 114.6
- 4:00 Eurozone Flash Manufacturing PMI. Estimate 56.5. Actual 57.0
- 4:00 Eurozone Flash Services PMI. Estimate 56.5. Actual 56.2
- 9:00 US FOMC Member Neel Kashkari Speaks
- 9:45 US Flash Manufacturing PMI. Estimate 53.2
- 9:45 US Flash Services PMI. Estimate 53.3
- 10:00 US New Home Sales. Estimate 611K
- 10:00 US Richmond Manufacturing Index. Estimate 15
- 10:00 FOMC Member Neel Kashkari Speaks
- 17:00 FOMC Member Patrick Harker Speaks
*All release times are EDT
*Key events are in bold
EUR/USD for Tuesday, May 23, 2017
EUR/USD Tuesday, May 23 at 6:40 EDT
Open: 1.1239 High: 1.1268 Low: 1.1221 Close: 1.1245
EUR/USD was flat in the Asian session. The pair dipped early in the European session but has recovered and continues to move upwards
- 1.1242 has switched to support. It remains fluid and could see further action in the Tuesday session
- 1.1366 is the next line of resistance
Further levels in both directions:
- Below: 1.1242, 1.1122, 1.0985 and 1.0873
- Above: 1.1366, 1.1465 and 1.1534
- Current range: 1.1242 to 1.11366
OANDA’s Open Positions Ratio
EUR/USD ratio is showing gains in long positions. Currently , short positions have a majority (66%), indicative of EUR/USD reversing directions and moving lower.