EUR/USD – Euro subdued ahead of German CPI, Fed rate statement

EUR/USD is unchanged in the Wednesday session. Currently, the pair is trading at 1.1434, down 0.01% on the day. After a slow start to the week, there are a host of events on Wednesday, highlighted by German Preliminary CPI, which is expected to post a decline of 0.9%. In the U.S., the highlight is the Federal Reserve rate statement. The U.S. will release a host of employment numbers during the week, starting off with ADP nonfarm employment. The indicator is forecast to fall sharply to 180 thousand, down from 271 thousand. On Thursday, the eurozone releases Preliminary Flash GDP for Q4 and the U.S. publishes Employment Cost Index and unemployment claims.

The eurozone economy has slowed in recent months, and Germany has not been immune to softer numbers. There was positive news on Wednesday, as German GfK Consumer Confidence estimating a score of 10.8 for February, higher than the revised reading of 10.5 points for January. The well-respected GfK projected that consumer spending would climb 1.5% in 2019, but warned that a further escalation in the global trade dispute would hurt consumer spending. Last week, German Ifo Business Climate dipped to 99.1, below the 100-level for the first time since 2010. 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.

The Federal Reserve was aggressive in 2018, raising rates by a quarter-point on four occasions. With a nasty trade war dampening global economic growth, it is clear that the Fed will ease up on monetary policy this year. But, by how much? There are a various answers, depending on who you ask. The markets are not expecting any increases this year, while the Federal Reserve continues to stick with a forecast of two hikes. The Congressional Budget Office has also weighed in, saying that it expect further rate increases this year. With no rate move expected at the Wednesday meeting, the markets will be focusing on the tone of the rate statement.

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EUR/USD Fundamentals

Wednesday (January 30)

  • 1:30 French Flash GDP. Estimate 0.2%. Actual 0.3%
  • 2:00 German GfK Consumer Climate. Estimate 10.3. Actual 10.8
  • 2:00 German Import Prices. Estimate -0.8%. Actual -1.3%
  • All Day – German Preliminary CPI. Estimate -0.9%
  • 2:45 French Consumer Spending. Estimate -0.3%. Actual -1.5%
  • Tentative – Italian 10-year Bond Auction
  • Tentative – Germany 10-year Bond Auction
  • 8:15 US ADP Nonfarm Employment Change. Estimate 180K
  • 10:00 US Pending Home Sales. Estimate 0.8%
  • 10:30 US Crude Oil Inventories. Estimate 3.0M
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate <2.50%
  • 14:30 US FOMC Press Conference

Thursday (January 31)

  • 2:00 German Retail Sales. Estimate -0.5%
  • 3:55 German Unemployment Change. Estimate -11K
  • 5:00 Eurozone Preliminary Flash GDP. Estimate 0.2%
  • 5:00 Eurozone Unemployment Rate. Estimate 7.9%
  • 8:30 US Employment Cost Index. Estimate 0.8%
  • 8:30 US Unemployment Claims. Estimate 215K

*All release times are EST

*Key events are in bold

EUR/USD for Wednesday, January 30, 2019

EUR/USD for January 30 at 6:55 EST

Open: 1.1433 High: 1.1450 Low: 1.1422 Close: 1.1434

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

  • 1.1300 is providing support
  • 1.1434 remains fluid. Currently, it is a weak resistance line
  • Current range: 1.1300 to 1.1434

Further levels in both directions:

  • Below: 1.1300, 1.1212 and 1.1120
  • Above: 1.1434, 1.1553, 1.1685 and 1.1803

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.
Kenny Fisher

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