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EUR/USD – Lack of fundamental releases leaves euro subdued

EUR/USD continues to gain ground this week. In Tuesday trade, the pair is trading at 1.1432, up 0.03% on the day. On the release front, there are on eurozone or German releases. In the U.S. the key event is CB Consumer Confidence, which is expected to drop to 125.0 points. On Wednesday, Germany releases Preliminary CPI and the Federal Reserve will publish its monthly rate statement.

As the largest economy in the eurozone, Germany is a bellwether for the rest of the bloc. Recent German numbers have been weak, raising concerns about the strength of the eurozone economy. On Friday, German Ifo Business Climate dipped to 99.1, below the 100-level for the first time since 2010. Earlier in the week, a ZEW survey found that institutional investors remain deeply pessimistic about the German and eurozone economies. There was also grim news from the manufacturing front, as German manufacturing PMI slipped to 49.9, falling into contraction territory for the first time since 2013.

On Monday, ECB President Mario Draghi painted a mixed picture in his testimony before a EU parliamentary committee. Draghi highlighted serious concerns affecting the eurozone. Draghi pointed to uncertainties over geopolitical factors and  protectionism threats continued to weigh on the eurozone economy. On the bright side, Draghi noted that an improving labor market and stronger inflation were fueling expansion in the eurozone. At last week’s policy meeting, the ECB said that risks to growth have “moved to the downside”. This pessimistic comments were result of weaker eurozone releases in recent weeks. The economy has slowed, as weaker growth in China and trade tensions, such as Brexit, have dampened business and consumer confidence.

How many times will the Fed raise rates in 2019? The answer varies, depending on who you ask. The markets are not expecting any increases, while the Federal Reserve continues to stick with a forecast of two hikes. The Congressional Budget Office (CBO) has also weighed in, saying that it expects further rate increases this year. The CBO made the forecast in its 10-year outlook update, but did not specify how many hikes. The CBO report projected growth of 2.3% for the U.S economy in 2019, matching the forecast of the Federal Reserve.

Commodities Weekly: Palladium retreats from record highs [1]

EUR/USD Fundamentals

Tuesday (January 29)

Wednesday (January 30)

*All release times are EST

*Key events are in bold

EUR/USD for Tuesday, January 29, 2019

EUR/USD for January 29 at 6:25 EST

Open: 1.1428 High: 1.1450 Low: 1.1421 Close: 1.1431

EUR/USD Technical

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

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