The euro is unchanged in the Tuesday session, after starting the week with losses. Currently, EUR/USD is trading at 1.1760, up 0.09% on the day. On the release front, German and European Manufacturing PMIs were sharp. German Flash Manufacturing PMI ticked lower to 60.5, beating the estimate of 60.1 points. Eurozone Manufacturing PMI improved to 58.6, easily beating the estimate of 57.9 points. There are no major US events on the schedule. On Wednesday, Germany releases Ifo Business Climate, and the US will publish US Core Durable Goods Orders.
The crisis in Catalonia has entered its third week, and with the central and Catalan governments entrenched in their positions, the worst may be yet to come. On Saturday, the central government said it would imposing direct rule, invoking Article 155 of the Spanish Constitution. However, there is plenty of uncertainty, as this clause has never been used. Madrid has said it will remove Catalan President Carles Puigemont from power, take over the media and hold new elections for the region. Unsurprisingly, the Catalan government has condemned this latest salvo and has called for “massive civil disobdience”. Developments are unfolding daily, and investors are nervously watching the trouble in Spain, the eurozone’s fourth largest economy. The European Union has refused to intervene, calling the crisis an internal matter. So far, the woes in Catalonia have not affected the euro.
The eurozone economy has been performing well, with much of the credit going to a robust manufacturing sector in Germany and the eurozone. This was underscored on Tuesday, as manufacturing PMIs were strong and continue to point to expansion. The manufacturing sector remains solid, as global demand for European exports remains strong and consumer spending has been steady. German and European Services PMIs both missed their estimates, but still indicated expansion in the services sector.
The Brexit clock is ticking, with Britain leaving the European Union in March 2019. However, negotiations between the parties have foundered, as the sides remain far apart on a number of key issues, including the size of Britain’s bill when it says goodbye to the club. Prime Minister May addressed the 27 EU leaders last week in Brussels, imploring the European to show some flexibility. This didn’t prevent the EU leaders from stating that trade negotiations with Britain would not commence until more progress is made on non-trade matters. Prime Minister May has a razor-thin majority in parliament, and adding to the mix, there are sharp divisions in her cabinet regarding Brexit, with some senior ministers in favor of taking a hard stance and leaving the EU without an agreement if the Europeans fail to soften their position.
Tuesday (October 24)
- 3:00 French Flash Manufacturing PMI. Estimate 56.2. Actual 56.7
- 3:00 French Flash Services PMI. Estimate 57.0. Actual 57.4
- 3:30 German Flash Manufacturing PMI. Estimate 60.1. Actual 60.5
- 3:30 German Flash Services PMI. Estimate 55.5. Actual 55.2
- 4:00 Eurozone Flash Manufacturing PMI. Estimate 57.9. Actual 58.6
- 4:00 Eurozone Flash Services PMI. Estimate 55.7. Actual 54.9
- 9:00 Belgian NBB Business Climate. Estimate -2.9
- 9:45 US Flash Manufacturing PMI. Estimate 53.3
- 9:45 US Flash Services PMI. Estimate 55.2
- 10:00 US Richmond Manufacturing Index. Estimate 17
Wednesday (October 25)
- 4:00 German Ifo Business Climate. Estimate 115.3
- 8:30 US Core Durable Goods Orders. Estimate 0.5%
*All release times are GMT
*Key events are in bold
EUR/USD for Tuesday, October 24, 2017
EUR/USD Tuesday, October 24 at 6:25 EDT
Open: 1.1750 High: 1.1770 Low: 1.1743 Close: 1.1760
EUR/USD edged upwards in the Asian session but has given up these gains in European trade
- 1.1712 is providing support
- 1.1876 is the next resistance line
Further levels in both directions:
- Below: 1.1712, 1.1611, 1.1489 and 1.1366
- Above: 1.1876, 1.1996 and 1.2018
- Current range: 1.1712 to 1.1876
OANDA’s Open Positions Ratio
EUR/USD is showing movement towards long positions. Currently, short positions have a majority (59%), indicative of EUR/USD breaking out and moving to lower ground.
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.