EUR/USD – Euro Steady as Markets Eye ECB Rate Statement

EUR/USD has posted slight gains in the Thursday session. Currently, the pair is trading at 1.2175, up 0.12% on the day. On the release front, German GfK Consumer Confidence edged down to 10.8, close to the estimate of 10.9 points. Later in the day, the ECB releases a rate statement, with ECB President Mario Draghi following up with a press conference. In the US, durable goods orders are expected to soften, and unemployment claims are forecast to drop slightly. On Friday, the US releases Advance GDP and UoM Consumer Sentiment.

All eyes are on the ECB, which will announce its most recent monetary policy decisions on Thursday. Eurozone indicators have softened in recent weeks, raising concerns that ECB President Mario Draghi could sound dovish about the eurozone economy. This could weigh on the euro. At the March meeting, policymakers made a minor move and dropped a pledge to increase stimulus if needed. The ECB has said it intends to continue bond purchases until at least September and will maintain interest rates at current levels until “well past” the end of the program. Traders shouldn’t expect any dramatic moves at the policy meeting, as the bank will likely continue to preach patience and prudence.

The euro has lost close to 1% this week, as the US dollar has flexed its muscles against its rivals. Much of the credit for the dollar rally goes to rising yields on US bonds, which have hit 4-year highs this week. On Wednesday, 10-year US Treasury notes climbed to 3.015%, and 2-year bonds have increased to 2.504 percent. With inflation appearing to be on the rise, there are stronger expectations that the Federal Reserve will raise rates four times in 2018, which is good news for the US dollar. Another factor helping the US dollar has been a recent reduction in geopolitical risk, with an easing of tensions between North and South Korea, and a lull in the conflict in Syria.

Currency markets yield to dollar demand

Focus on Draghi – ECB to be Positive

EUR/USD Fundamentals

 Thursday (April 26)

  • 2:00 German GfK Consumer Climate. Estimate 10.9. Actual 10.8
  • 3:00 Spanish Unemployment Rate. Estimate 16.3%. Actual 16.7%
  • 7:45 ECB Minimum Rate. Estimate 0.00%
  • 8:30 ECB Press Conference
  • 8:30 US Core Durable Goods Orders. Estimate 0.5%
  • 8:30 US Durable Goods Orders. Estimate 1.6%
  • 8:30 US Unemployment Claims. Estimate 230K
  • 8:30 US Goods Trade Balance. Estimate -74.8B
  • 8:30 US Preliminary Wholesale Inventories. Estimate 0.6%
  • 10:30 US Natural Gas Storage. Estimate -11B

 Friday (April 27)

  • 1:00 French Flash GDP. Estimate 0.4%
  • 2:00 German Import Prices. Estimate 0.1%
  • 2:45 French Consumer Spending. Estimate 0.4%
  • 2:45 French Preliminary CPI. Estimate 0.1%
  • 3:55 German Unemployment Change. Estimate -15K
  • 8:30 US Advance GDP. Estimate 2.0%
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 98.0

*All release times are DST

*Key events are in bold

EUR/USD for Thursday, April 26, 2018

EUR/USD for April 26 at 6:30 DST

Open: 1.2287 High: 1.2290 Low: 1.2156 Close: 1.2174

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.2025 1.2025 1.2092 1.2235 1.2319 1.2460

EUR/USD edged higher in the Asian session. In European trade, the pair edged lower but recovered

  • 1.2092 is providing support
  • 1.2235 was tested earlier in resistance and remains a weak line

Further levels in both directions:

  • Below: 1.2092, 1.2025 and 1.1916
  • Above: 1.2235, 1.2319, 1.2460 and 1.2581
  • Current range: 1.2092 to 1.2235

OANDA’s Open Positions Ratio

EUR/USD ratio is showing little movement in the Thursday session. Currently, long and short positions are almost evenly split, indicative of a lack of trader bias as to what direction EUR/USD takes next.

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.