EUR/USD – Euro Shrugs off Dismal German Confidence Report

EUR/USD continues to have a quiet week. On Tuesday, the pair is trading at 1.1792, up 0.05% on the day. On the release front, German ZEW Economic Sentiment posted a dismal reading of -16.1 points, missing the estimate of -14.6 points. Eurozone ZEW Economic Sentiment followed the same trend, with a reading of -12.6, well below the forecast of 0.1 points. In the US, the focus is on consumer inflation data. CPI is expected to remain pegged at 0.2% and Core CPI is forecast to stay unchanged 0.1% percent. On Wednesday, the US will release PPI reports and the Federal Reserve is expected to raise interest rates to a range between 1.75% and 2.00%.

The leaders of the U.S and North Korea met in a historic summit in Singapore on Tuesday. The joint statement put out by leaders was short on details, but President Trump said that President Kim Jong-un had reaffirmed its full commitment to complete denuclearization of North Korea. Although the crucial issue of verification was not addressed, there’s no denying that tensions have significantly eased and that the summit could mark a first step in bringing peace to the Korean peninsula.

The focus will be on central banks this week, with statements from the Federal Reserve on Wednesday and the ECB on Thursday. The Fed is widely expected to raise rates, with odds of a quarter-rate hike at 94%. Although the rate increase has been priced in, the U.S dollar could still make some gains against its major rivals. In Europe, the ECB will be looking for any clues with regard to the ECB’s asset-purchase program. Currently, the bank is purchasing EUR 30 billion/mth, and the scheme is scheduled to wind up in September. However, some ECB policymakers want to phase out the program slowly, rather than turn off the tap completely in September. ECB chief economist Peter Praet recently said that the ECB board members would conduct a detailed discussion about the fate of the stimulus package at the June meeting. Mario Draghi will likely make mention of the program at his press conference, so traders should be prepared for some volatility from EUR/USD on Thursday.

  It’s showtime !

EUR/USD Fundamentals

Tuesday (June 12)

  • 1:30 French Final Private Payrolls. Estimate 0.3%. Actual 0.2%
  • 4:00 Italian Quarterly Unemployment Rate. Estimate 11.1%. Actual 11.1%
  • 5:00 German ZEW Economic Sentiment. Estimate -14.6. Actual -16.1
  • 5:00 Eurozone ZEW Economic Sentiment. Estimate 0.1. Actual -12.6
  • 6:00 US NFIB Small Business Index. Estimate 105.2
  • 8:30 US CPI. Estimate 0.2%
  • 8:30 US Core CPI. Estimate 0.1%
  • 13:01 US 30-year Bond Auction
  • 14:00 US Federal Budget Balance. Estimate -119.0B

Wednesday (June 13)

  • 5:00 Eurozone Employment Change. Estimate 0.3%
  • 5:00 Eurozone Industrial Production. Estimate -0.5%
  • 8:30 US PPI. Estimate 0.3%
  • 8:30 US Core PPI. Estimate 0.2%
  • 14:00 US FOMC Economic Projections
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate <2.00%
  • 14:30 US FOMC Press Conference

*All release times are DST

*Key events are in bold

EUR/USD for Tuesday, June 12, 2018

EUR/USD for June 12 at 13:00 DST

Open: 1.1786 High: 1.1809 Low: 1.1741 Close: 1.1792

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1448 1.1613 1.1718 1.1809 1.1915 1.1996

EUR/USD edged lower in the Asian session. In European trade, the pair reversed directions and moved to higher ground

  • 1.1718 is providing support
  • 1.1809 was tested earlier in resistance and remains under pressure

Further levels in both directions:

  • Below: 1.1718, 1.1613 and 1.1448
  • Above: 1.1809, 1.1915, 1.1996 and 1.2154
  • Current range: 1.1718 to 1.1809

OANDA’s Open Positions Ratio

EUR/USD ratio showed movement towards short positions. Currently, long positions have a majority (54%), indicative of trader bias towards EUR/USD continuing to climb to higher 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.