EUR/USD – Euro steady ahead of ECB meeting

EUR/USD is steady in the Thursday session. Currently, the pair is trading at 1.1380, up 0.10% on the day. The ECB holds its policy meeting and is expected to wind up its stimulus program. German Final CPI dropped to 0.1%, matching the estimate. In the U.S., the key event is unemployment claims, which is expected to drop to 226 thousand. On Friday, Germany and the eurozone release manufacturing PMIs, and the U.S. will publish retail sales reports.

After three years of stimulus, the ECB is expected to finally wind up the bank’s bond purchase program at the Thursday policy meeting. Through the program, the ECB purchased some 2.5 trillion euros in assets. The program was implemented in order to kick-start the economy and raise ultra-low inflation levels. Inflation has moved closer to the ECB target of around 2 percent, and the eurozone economy performed well earlier in the year. This prompted the ECB to announce that it would wind up the program in December. However, economic conditions have deteriorated in recent months, as the nagging U.S.-China trade war has weighed on the global economy and hurt the export and manufacturing sectors in Germany and the eurozone. Although the timing may not be ideal, the ECB is likely to stick with its pledge to wind up stimulus, since a change in stance would severely hurt its credibility.

At the same time, the ECB is expected to fully reinvest the proceeds and maintain its bond holdings as long as is needed, in order to boost inflation. The ECB target of around 2 percent has remained elusive, and weak economic activity in the eurozone in the second half of the year is weighing on inflation levels.

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EUR/USD Fundamentals

Thursday (December 13)

  • 2:00 German Final CPI. Estimate 0.1%. Actual 0.1%
  • 2:45 French Final CPI. Estimate -0.2%. Actual -0.2%
  • 7:45 Eurozone Main Refinancing Rate. Estimate 0.00%
  • 8:30 ECB Press Conference
  • 8:30 US Import Prices. Estimate -1.0%
  • 8:30 US Unemployment Claims. Estimate 226K
  • 10:30 US Natural Gas Storage. Estimate -81B
  • 13:01 US 30-year Bond Auction
  • 14:00 US Federal Budget Balance. Estimate -193.5B

Friday (December 14)

  • 2:00 German WPI
  • 3:30 German Flash Manufacturing PMI. Estimate 51.8
  • 3:30 German Flash Services PMI. Estimate 53.4
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 51.9
  • 4:00 Eurozone Flash Services PMI. Estimate 53.4
  • 8:30 US Core Retail Sales. Estimate 0.2%
  • 8:30 US Retail Sales. Estimate 0.1%

*All release times are EST

*Key events are in bold

EUR/USD for Thursday, December 13, 2018

EUR/USD for December 13 at 5:45 EST

Open: 1.1369 High: 1.1394 Low: 1.1363 Close: 1.1380

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1120 1.1212 1.1300 1.1434 1.1553 1.1685

EUR/USD was flat in the Asian session and has ticked higher in European trade

  • 1.1300 is providing support
  • 1.1434 is the next resistance line
  • Current range: 1.1300 to 1.1434

Further levels in both directions:

  • Below: 1.1300, 1.1212, 1.1120 and 1.0992
  • Above: 1.1434, 1.1553 and 1.1685

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.