EUR/USD – Euro Breaks 1.19, Investors Await US Final GDP

The euro has ticked higher in the Thursday session. Currently, EUR/USD is trading at 1.1880, up 0.07% on the day. On the release front, there are no eurozone events on the schedule. In the US, today’s key event is Final GDP. We’ll also get a look at the Philly Fed Manufacturing Index and unemployment claims. On Friday, Germany releases GfK Consumer Climate, and there are three key events in the US – Core Durable Goods, New Home Sales and UoM Consumer Sentiment.

President Donald Trump can finally hang his hat on a legislative victory, after a difficult first year in office. On Wednesday, the House of Representatives voted for to pass Trump’s tax reform bill, after it narrowly passed in the Senate, by a vote of 51-48. Trump is expected to sign the bill into law next week. The tax legislation marks the first major overhaul of the US tax code in 30 years, and reduces corporate taxes from 35% to 21%. After failing to overturn Obamacare, the Republicans finally scored a big win, and will now have to sell the tax plan to a skeptical public, with congressional elections slated for November 2018.

The US economy has been firing on all cylinders, marked by strong growth and low unemployment. The fly in the ointment has been inflation, which remains well below the Federal Reserve target of 2.0%. The economy gets a report card for its third quarter performance, with the release of Final GDP on Thursday. Investors expect another banner quarter, as the estimate stands at 3.3%, which would be unchanged from the Preliminary GDP release. If the reading is wide of the forecast, we could see some movement from EUR/USD.

 

EUR/USD Fundamentals

Thursday (December 21)

  • 8:30 US Final GDP. Estimate 3.3%
  • 8:30 US Philly Fed Manufacturing Index. Estimate 21.5
  • 8:30 US Unemployment Claims. Estimate 232K
  • 8:30 US Final GDP Price Index. Estimate 2.1%
  • 9:00 US HPI. Estimate 0.4%
  • 10:00 US Consumer Confidence. Estimate 0 points
  • 10:00 US CB Consumer Leading Index. Estimate 0.4%
  • 10:30 US Natural Gas Storage. Estimate -160B

Friday (December 22)

  • 2:00 German GfK Consumer Climate. Estimate 10.7
  • 2:45 French Consumer Spending. Estimate 1.4%
  • 8:30 US Core Durable Goods Orders. Estimate 0.5%
  • 8:30 US Durable Goods Orders. Estimate 2.1%
  • 8:30 US Personal Spending. Estimate 0.5%
  • 10:00 US New Home Sales. Estimate 654K
  • 10:00  UoM Consumer Sentiment. Estimate 97.1

*All release times are GMT

*Key events are in bold

EUR/USD for Thursday, December 21, 2017

EUR/USD for December 21 at 5:40 EDT

Open: 1.1872 High: 1.1887 Low: 1.1863 Close: 1.1880

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1657 1.1777 1.1876 1.1961 1.2092 1.2221

EUR/USD showed little movement in the Asian session and has edged higher in European trade

  • 1.1876 is fluid. Currently, it is a weak support line
  • 1.1961 is the next resistance line

Further levels in both directions:

  • Below: 1.1876, 1.1777, 1.1657 and 1.1574
  • Above: 1.1961, 1.2092 and 1.2221
  • Current range: 1.1876 to 1.1961

OANDA’s Open Positions Ratio

EUR/USD is showing movement towards short positions. Currently, short positions have a majority (60%), 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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.