EUR/USD – Euro Inches Lower, German and Eurozone GDP Reports Next

The euro has started the trading week quietly. Currently, EUR/USD is trading at 1.1648, down 0.19% on the day. In economic news, there are no major German or Eurozone indicators. German Wholesale Price Index slowed to 0.0%, missing the forecast of 0.4%. On Tuesday, Germany and the eurozone release GDP reports, and Germany will publish ZEW Economic Sentiment. As well, Mario Draghi and Janet Yellen will participate in a panel at an event organized by the ECB.

The ECB tends to move cautiously, and in October, the central bank finally tapered its stimulus program (QE), with a “less but longer” setup. Starting in January, the ECB will cut its monthly asset purchases from EUR 60 billion to 30 billion. However, QE is being extended until September 2018, as the Bank is weaning the eurozone off stimulus. With the eurozone economy exceeding expectations in 2017, some policymakers have expressed reservations about the gradual pace of trimming stimulus, arguing that the Bank should cut the asset purchases at a faster rate. Governing Council member Philip Lane, head of the Irish central bank, said last week that if inflation moves closer to 2 percent, the ECB should tighten at a faster pace. The heads of the German and Austrian central banks, who are also on the Governing Council, went even further, saying that the ECB should have indicated a clear intent to end asset purchases, rather than announce an extension. If eurozone indicators continue to point upwards, ECB President Mario Draghi will be under pressure to terminate QE before September, or lower the size of the asset purchases. If that happens, the euro could gain ground.

It’s report card time on Tuesday, as Germany and the eurozone release GDP reports for the third quarter. Both releases are forecast to show respectable gain of 0.6% percent. The German economy has looked sharp in 2017, buoyed by solid consumer demand and a strong global appetite for German products. Germany has been the locomotive for the euorozone, and boosted traditional laggards such as France and Spain. Geopolitical concerns such as Catalonia and Brexit have the potential to crash the party, but in the meantime, eurozone indicators have generally been pointing upwards.

EUR/USD Fundamentals

Monday (November 13)

  • 2:00 German WPI. Estimate 0.4%. Actual 0.0%
  • 14:00 US Federal Budget Balance. Estimate -58.2

Tuesday (November 14)

  • 2:00 German Preliminary GDP. Estimate 0.6%
  • 5:00 ECB President Mario Draghi Speaks
  • 5:00 Eurozone Flash GDP. Estimate 0.6%
  • 5:00 German ZEW Economic Sentiment. Estimate 19.8
  • 5:00 US Federal Chair Janet Yellen Speaks
  • 8:30 US PPI. Estimate 0.1%
  • 8:30 US Core PPI. Estimate 0.2%

*All release times are GMT

*Key events are in bold

EUR/USD for Monday, November 13, 2017

EUR/USD for November 13 at 5:25 EDT

Open: 1.1665 High: 1.1666 Low: 1.1638 Close: 1.1643

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1366 1.1489 1.1574 1.1657 1.1777 1.1876

EUR/USD showed little movement in the Asian session and has inched lower in European trade

  • 1.1574 is providing support
  • 1.1657 is fluid and has switched to a resistance role. It could see further action during the day

Further levels in both directions:

  • Below: 1.1574, 1.1489, 1.1366 and 1.1268
  • Above: 1.1657, 1.1777 and 1.1876
  • Current range: 1.1574 to 1.1657

OANDA’s Open Positions Ratio

EUR/USD is showing little movement at the start of the week. Currently, short positions have a majority (64%), indicative of EUR/USD reversing directions and moving downwards.

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.