EUR/USD – Euro Jumps Above 1.20 as German Consumer Climate Picks Up

EUR/USD has posted considerable gains in the Tuesday session. Currently the pair is trading at 1.2046, up 0.57% on the day. On the release front, German GfK Consumer Confidence edged up to 10.9, beating the estimate of 10.8 points. French Consumer Spending came in at 0.7%, matching the forecast. French Preliminary GDP improved to 0.5%, also matching the forecast. In the US, today’s key event is CB Consumer Confidence, which is expected to dip to 120.9 points. On Wednesday, Germany releases Preliminary CPI, and the US publishes ADP Nonfarm Payrolls and Preliminary GDP.

The euro continues to push higher, and has climbed an impressive 2.1% since Friday. Earlier on Tuesday, the euro punched above the 1.20 line, for the first time since January 2015. On Friday, ECB President Mario Draghi took a page out of Janet Yellen’s page book, opting to steer away from any discussion about ECB monetary policy in a speech at a meeting of central bankers in Jackson Hole. Draghi seems to have learned a lesson from a meeting of central bankers in Portugal in June, when the markets seized on his comments that the euro zone was undergoing a broad recovery, and the euro soared. With the euro zone enjoying solid growth in 2017, analysts expect the ECB to address its plans for its asset purchases program (QE), which is expected to terminate in December. The ECB is widely expected to taper its QE program early next year, and the euro has jumped 14% against the dollar in 2017.

At the Jackson Hole meeting, Yellen did not discuss interest rate policy, choosing instead to emphasize that the financial regulations put in place since the financial crisis in 2008 should not be undermined. Her message appeared aim at Donald Trump, who has expressed his intention to relax banking and financial regulations which he has argued are hampering business. The markets remain skeptical about a third and final rate hike this year, as the odds of an increase in December have been falling – currently, the odds a December hike are at 35%, down from 42% a month ago.

EUR/USD Fundamentals

Tuesday (August 29)

  • 2:00 German GfK Consumer Climate. Estimate 10.8. Actual 10.9
  • 2:45 French Consumer Spending. Estimate 0.7%. Actual 0.7%
  • 2:45 French Preliminary GDP. Estimate 0.5%. Actual 0.5%
  • 9:00 US S&P/CS Composite-20 HPI. Estimate 5.6%
  • 10:00 US CB Consumer Confidence. Estimate 120.9

Upcoming Events

Wednesday (August 30)

  • All Day – German Preliminary CPI. Estimate 0.1%
  • 8:15 US ADP Nonfarm Employment Change. Estimate 186K
  • 8:30 US Preliminary GDP. Estimate 2.7%

*All release times are GMT

*Key events are in bold

EUR/USD for Tuesday, August 29, 2017

EUR/USD Tuesday, August 29 at 5:00 EDT

Open: 1.1978 High: 1.2047 Low: 1.1956 Close: 1.2046

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1712 1.1876 1.1996 1.2108 1.2221 1.2358

EUR/USD was flat in the Asian session. The pair has posted considerable gains in the European session

  • 1.1996 is providing support
  • 1.2108 is the next resistance line

Further levels in both directions:

  • Below: 1.1996, 1.1876, 1.1712 and 1.1616
  • Above: 1.2108, 1.2221 and 1.2358
  • Current range: 1.1996 to 1.2108

OANDA’s Open Positions Ratio

In the Tuesday session, EUR/USD ratio is showing long positions with a majority (66%). This is indicative of EUR/USD continuing to move higher.

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

Market Analyst at OANDA
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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.