EUR/USD – Euro Steady to Start Week, US Retail Sales Next

EUR/USD has posted slight gains in the Monday session. Currently, the pair is trading at 1.2360, up 0.23% on the day. On the release front, there is only one eurozone event. The German Wholesale Price Index improved to 0.0%, but fell short of the estimate of 0.4%. In the US, the key indicators are retail sales reports. Retail Sales are expected to improve to 0.4%, after two straight declines. Core Retail Sales is forecast to remain unchanged at 0.2%. On Tuesday, German releases ZEW Economic Sentiment, and the US will publish Building Permits and Housing Starts.

It was a dramatic weekend, as a US-led strike destroyed several chemical installations in Syria. Predictably, Syria and Russia strongly condemned the attack, but are unlikely to retaliate despite the rhetoric. The markets had already priced in an attack, and are hopeful that Trump’s declaration of “mission accomplished” means that things will remain relatively quiet in Syria. However, further chemical attacks by the Syrian regime could trigger a response from the US and its allies, which could result in volatility in the markets, similar to what occurred last week.

US consumer numbers ended the week on a disappointing note, as UoM Consumer Sentiment dropped to 97.2, down from 102.0 a month earlier. The reading missed the estimate of 100.6, and marked a 3-month low. Still, with the economy continuing to perform low and unemployment at very low levels, the US consumer remains very optimistic.

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 maintain rates at the May policy meeting and raise rates by a quarter-point in June.

Markets take Syria Strikes in Stride

EUR/USD Fundamentals

 Monday (April 16)

  • 1:52 German WPI. Estimate 0.4%. Actual 0.0%
  • 8:30 US Core Retail Sales. Estimate 0.2%
  • 8:30 US Retail Sales. Estimate 0.4%
  • 8:30 US Empire State Manufacturing Index. Estimate 19.8
  • 10:00 US Business Inventories. Estimate 0.6%
  • 10:00 US NAHB Housing Market Index. Estimate 71
  • 13:15 US FOMC Member Raphael Bostic Speaks
  • 16:00 US TIC Long-Term Purchases

 Tuesday (April 17)

  • 5:00 German ZEW Economic Sentiment. Estimate -0.8
  • 5:00 Eurozone ZEW Economic Sentiment. Estimate 7.3
  • 8:30 US Building Permits. 1.33M
  • 8:30 US Housing Starts. Estimate 1.27M

*All release times are DST

*Key events are in bold

 

EUR/USD for Monday, April 16, 2018

EUR/USD for April 16 at 6:10 DST

Open: 1.2331 High: 1.2369 Low: 1.2323 Close: 1.2360

EUR/USD Technical

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

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

  • 1.2319 is providing support
  • 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 is showing little movement in the Monday session. Currently, short positions have a majority (56%), indicative of EUR/USD reversing directions 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.