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Euro Ticks Higher as German GDP Matches Forecast

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.

EUR/USD Fundamentals

Tuesday (May 23)

*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 Technical

S1 S2 S1 R1 R2 R3
1.0985 1.1122 1.1242 1.1366 1.1465 1.1534

EUR/USD was flat in the Asian session. The pair dipped early in the European session but has recovered and continues to move upwards

Further levels in both directions:

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.

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

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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