EUR/USD – Euro Trading Sideways as German CPI Matches Forecast

EUR/USD has ticked higher in the Friday session. Currently, the pair is trading at 1.2339, up 0.10% on the day. On the release front, German Final CPI edged lower to 0.4%, matching the estimate. The US will release UoM Consumer Sentiment, which is expected to drop to 100.6 points.

Tensions continue to simmer in the Middle East, as Syria braces for a strike by the United States. President Trump has vowed to respond to an alleged chemical attack by Syrian forces, and a US navy task force is sailing towards Syria. Russia has promised to shoot down any US missiles, and relations between the US and Russia have nosedived. The US has received support from France and the UK, and if the US does carry out a military strike, the currency markets could respond with volatility.

The Federal Reserve minutes from the March meeting were hawkish in tone, reflective of a solid US economy. All of the Fed policymakers indicated that the US economy would continue to improve and that inflation would rise in the next few months. At the March meeting, the Fed unanimously voted to raise rates by a quarter-point, bringing the benchmark rate to a range between 1.50% and 1.75%. The Fed projection for rate policy in 2018 remains at three hikes, although there is speculation that the Fed could revise the forecast to four rate hikes. Last week, Fed Chair Jerome Powell said that the Fed would likely continue to raise rates in order to keep a lid on inflation, but added that the rate moves would be gradual. A new headache for the Fed is the escalating trade battle between the US and China, which could hurt the economy and raise consumer prices. The Fed is expected to sit tight in May and raise rates at the June meeting.

Investors to Remain Sensitive to Market Tensions

EUR/USD Fundamentals

 Friday (April 13)

  • 2:00 German Final CPI. Estimate 0.4%. Actual 0.4%
  • 5:00 Eurozone Trade Balance. Estimate 20.2B. Actual 21.0B
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 100.6
  • 10:00 US JOLTS Jobs Openings. Estimate 6.11M
  • 10:00 US Preliminary UoM Inflation Expectations 

*All release times are DST

*Key events are in bold

EUR/USD for Friday, April 13, 2018

EUR/USD for April 13 at 5:55 DST

Open: 1.2327 High: 1.2346 Low: 1.2317 Close: 1.2333

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.2092 1.2235 1.2319 1.2460 1.2581 1.2662

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

  • 1.2319 is a weak support line
  • 1.2460 is the next resistance line

Further levels in both directions:

  • Below: 1.2319, 1.2235, 1.2092 and 1.2025
  • Above: 1.2460, 1.2581 and 1.2662
  • Current range: 1.2319 to 1.2460

OANDA’s Open Positions Ratio

EUR/USD ratio has reversed directions and is showing gains in long positions. Currently, short positions have a majority (58%), 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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.