- MarketPulse - https://www.marketpulse.com -

EUR/USD – Euro Stops Slide as GDP Matches Estimate, Fed Up Next

EUR/USD has stemmed this week’s losses in the Wednesday session. Currently, the pair is trading at 1.1999, up 0.05% on the day. On the release front, German and eurozone manufacturing reports were within expectations and continued to point to expansion. Preliminary Flash GDP came in at 0.4%, but matched the estimate. In the US, ADP Nonfarm Payrolls are expected to slide to 200 thousand. As well, the Federal Reserve will set the benchmark interest rate.

On the manufacturing front, German and eurozone PMI reports softened in March, but still met expectations. However, there is concern as both indicators dropped for a fourth straight month. The markets are hoping that after a sluggish first quarter, eurozone data in Q2 will improve in the second quarter.

All eyes are on the Federal Reserve, which will release a rate statement on Wednesday. Policymakers are expected to maintain the benchmark rate at a range between 1.50% and 1.75%, and analysts will be keeping a close eye on the rate statement for clues about future rate hikes. Although the Fed is currently projecting three rate hikes in 2018, there is growing sentiment that the Fed will bump this up to four increases. The Fed last raised rates in March, and some analysts see the Fed raising rates once each quarter  – in June, September and December. Higher inflation has raised speculation that the Fed will consider raising its rate hike forecast. The Fed’s preferred inflation gauge, the Personal Consumption Expenditures price index, hit the Fed’s target of 2% inflation for the first time in a year in March.

Dollar Stronger on Possibility Fed to Step up Tightening Pace [1]

 

EUR/USD Fundamentals

Wednesday (May 2)

Thursday (May 3)

*All release times are DST

*Key events are in bold

 

EUR/USD for Wednesday, May 2, 2018

EUR/USD for May 2 at 4:30 DST

Open: 1.1993 High: 1.2032 Low: 1.1988 Close: 1.1999

 

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1809 1.1915 1.2025 1.2092 1.2235 1.2319

EUR/USD has posted small gains in the Asian and European sessions

Further levels in both directions:

OANDA’s Open Positions Ratio

EUR/USD ratio has shown limited movement this week. Currently, short and long positions are evenly split, indicative of a lack of trader bias towards EUR/USD.

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 [5]

Market Analyst at OANDA [6]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all [5])