EUR/USD – Euro gains continue, Fed minutes next

EUR/USD has posted small gains in the Wednesday session. Currently, the pair is trading at 1.1590, up 0.17% on the day. In economic news, there are no major eurozone events. In the U.S, Existing Home Sales is expected to improve to 5.40 million. As well, the Federal Reserve will publish the minutes of the policy meeting earlier this month. On Thursday, Germany and the eurozone release PMI reports and the ECB will publish the minutes of its July meeting. The U.S will release unemployment claims.

All eyes are on the Federal Reserve, which publishes the minutes of its meeting from August 1. The Fed statement from that meeting described the economy as “strong”, the first time it used that term since 2006. Fed policymakers reiterated their commitment to raise interest rates gradually, as economic conditions remain strong. In the second quarter, GDP grew 4.1%, inflation has moved closer to the Fed’s target of 2%, and unemployment remains at record lows. The minutes are expected to underscore the Fed’s intent to raise rates twice more this year, in September and December. The Fed’s approach to rate hikes appears economically sound, but enter the undiplomatic President Trump, who has criticized the Fed, saying he was “not thrilled” with higher rates. Trump’s comments have fuelled the euro’s rally, as the currency pushed above the 1.16 line on Wednesday, for the first time since August 9.

On the heels of the release of the Fed minutes, the heads of the central bank will gather in picturesque Jackson Hole. Wyoming. Investors will be keenly following, looking for hints regarding future monetary policy on the part of the ECB and the Federal Reserve. The U.S economy continues to show strong growth but inflation and wage growth continue to lag, and Fed chair Jerome Powell will be expected to address these issues.

Focus on Fed Minutes and Jackson Hole

Wednesday (August 22)

  • 5:35 German 10-year Bond Auction. Actual 0.33/1.2
  • 10:00 US Existing Home Sales. Estimate 5.40M
  • 10:30 US Crude Oil Inventories. Estimate -1.6M
  • 14:00 US FOMC Meeting Minutes

Thursday (August 23)

  • 3:30 German Flash Manufacturing PMI. Estimate 56.5
  • 3:30 German Flash Services PMI. Estimate 54.3
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 55.1
  • 4:00 Eurozone Flash Services PMI. Estimate 54.4
  • 7:30 ECB Monetary Policy Meeting Accounts
  • 8:30 US Unemployment Claims 215K
  • Day 1 – Jackson Hole Symposium

*All release times are DST

*Key events are in bold

EUR/USD for Wednesday, August 22, 2018

EUR/USD for August 22 at 6:15 DST

Open: 1.1571 High: 1.1594 Low: 1.1553 Close: 1.1589

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1312 1.1434 1.1553 1.1637 1.1718 1.1840

EUR/USD was flat in the Asian session. In European trade, the pair edged lower but has reversed directions and moved upwards

  • 1.1553 is providing support
  • 1.1637 is under pressure in resistance

Further levels in both directions:

  • Below: 1.1553, 1.1434, 1.1312 and 1.1119
  • Above: 1.1637, 1.1718, 1.1840
  • Current range: 1.1553 to 1.1637

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 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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.