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EUR/USD – Euro edges lower as German consumer confidence softens

EUR/USD has posted slight losses in the Wednesday session, erasing the gains seen on Tuesday. Currently, the pair is trading at 1.1673, down 0.18% on the day. On the release front, German GfK Consumer Climate edged lower to 10.5, shy of the estimate of 10.6 points. In France, consumer spending remained pegged at 0.1%, missing the estimate of 0.3%. Preliminary GDP posted a gain for of 0.2% for a second straight quarter. In the U.S, Preliminary GDP in the second quarter is expected at 4.0%. The previous GDP report came in at 4.1% in July. We’ll also get a look at Pending Home Sales, which is forecast to drop to 0.3%. On Thursday, Germany releases Preliminary CPI and the U.S publishes personal spending and unemployment claims.

The euro has taken a pause from its recent rally, which began on Friday and saw the euro gain 1.4%. On Tuesday, EUR/USD punched above the 1.17 line for the first time since August 1. The euro received a boost early in the week from an unexpectedly strong business confidence report in Germany. The Ifo Business Climate report improved to 103.8, easily beating the estimate of 101.9 points. This marked the first time this year that business confidence has improved, thanks to a strong German economy and a pause in the global trade war. On Wednesday, the news was less positive, as German GfK Consumer Climate dropped from 10.6 to 10.5 points, continuing the downward trend which has marked 2017. Back in January, the indicator was at 11.0 points, underscoring a decrease in consumer confidence.

The euro was last above the 1.20 line in May, and this symbolic level could remain elusive for quite some time. The reason? Mario Draghi and his ECB colleagues continue to send out the message that the ECB has no plans to raise rates until after the summer of 2019. The markets are not expecting a rate hike before October 2019, which means that the euro won’t be able to attract investors based on higher interest rates. This means that the euro is not particularly attractive unless there is an unexpected improvement in the German and eurozone economies.

Dollar steady in slow Asia trading [1]

EUR/USD Fundamentals

Wednesday (August 29)

Thursday (August 30)

*All release times are DST

*Key events are in bold

EUR/USD for Wednesday, August 29, 2018

EUR/USD for August 29 at 6:25 DST

Open: 1.1694 High: 1.1698 Low: 1.1662 Close: 1.1673

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1434 1.1553 1.1637 1.1718 1.1840 1.1961

EUR/USD was flat for much of the Asian session. The pair has edged lower in European trade

Further levels in both directions:

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

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