EUR/USD – Euro Trading Sideways, US Inflation Report Next

It continues to be a quiet week for the euro. In the Tuesday session, EUR/USD is trading at 1.2439, up 0.05% on the day. On the release front, there are no eurozone or German indicators on the schedule. The US will release CPI and Core CPI, both of which are expected to slow to 0.2%. On Wednesday, ECB President Mario Draghi will speak at an ECB conference in Frankfurt and Germany releases Final CPI. The US will release key inflation and consumer spending reports.

US employment numbers were a mix on Friday. Wage growth dropped to 0.1% in February, down from 0.3% a month earlier. This missed the estimate of 0.2%, and marked the lowest gain in four months. The news was much better from nonfarm payrolls, which soared to 313 thousand, crushing the estimate of 205 thousand. The mixed readings have eased concerns about the Fed raising rates four times in 2018.

Is the German industrial sector in trouble? Last week’s numbers were surprisingly soft. Factory Orders in January plunged 3.9%, worse than the estimate of -1.9%. This marked the second decline in the past three months. This was followed Industrial Production, marking a second straight decline. Still, the German economy has performed well, and has led the impressive recovery in the eurozone.

Are Britain and the European Union heading towards a showdown? Last week, Donald Tusk, president of the European Council, advised Prime Minister May to “pink’ her red lines on Brexit, if Britain wants to maintain a close economic relationship with the bloc. May has insisted that there will be no customs union, and the European Court of Justice will have no jurisdiction over the UK. May set out these positions after the EU published its draft negotiating guidelines for Brexit, and the guidelines warned of “negative economic consequences” if Britain does not soften its position. Tusk added that he does not want to build a wall with Britain, and the EU could offer Britain a free trade agreement, with zero tariffs. At the same time, Tusk warned that Brexit will make trade between the two sides “complicated and costly” and the EU would not allow Britain to cherry pick in any future trade arrangement. EU members are expected to sign off on the negotiating guidelines at a summit in late March, which could trigger a nasty response from the May government.

Markets Look for a Second Opinion on U.S Inflation

EUR/USD Fundamentals

Tuesday (March 13)

  • 2:30 French Final Private Payrolls. Estimate 0.3%. Actual 0.4%
  • 5:00 Italian Quarterly Unemployment Rate. Estimate 11.0%. Actual 11.0%
  • 6:00 US NFIB Small Business Index. Estimate 107.1. Actual 107.6
  • All Day – ECOFIN Meetings
  • 8:30 US CPI. Estimate 0.2%
  • 8:30 US Core CPI. Estimate 0.2%
  • 13:01 US 30-year Bond Auction

Wednesday (March 14)

  • 3:00 German Final CPI. Estimate 0.5%
  • 4:00 ECB President Draghi Speaks
  • 6:00 Eurozone Employment Change. Estimate 0.3%
  • 6:00 Eurozone Industrial Production. Estimate -0.4%
  • 8:30 US Core Retail Sales. Estimate 0.3%
  • 8:30 US PPI. Estimate 0.1%
  • 8:30 US Retail Sales. Estimate 0.3%
  • 8:30 US Core PPI. Estimate 0.2%

*All release times are GMT

*Key events are in bold

EUR/USD for Tuesday, March 13, 2018

EUR/USD for March 13 at 6:45 EDT

Open: 1.2335 High: 1.2351 Low: 1.2315 Close: 1.2342

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.2092 1.2200 1.2286 1.2357 1.2460 1.2581

EUR/USD was flat in the Asian session and has edged in European trade

  • 1.2286 is providing support
  • 1.2357 is a weak next resistance line

Further levels in both directions:

  • Below: 1.2286, 1.2200 and 1.2092
  • Above: 1.2357, 1.2460, 1.2581 and 1.2660
  • Current range: 1.2286 to 1.2357

OANDA’s Open Positions Ratio

EUR/USD ratio is showing slight movement towards short 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.

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.