EUR/USD – Euro is steady, investors eye U.S GDP, German inflation

EUR/USD has steadied on Thursday trade, after a brief mid-week slide. The pair is trading at 1.1249, up 0.05% on the day. On the release front, the remainder of the week is busy. On Thursday, German releases Preliminary CPI. The U.S. publishes Final GDP and unemployment claims. On Friday, Germany releases retail sales, and the U.S. posts consumer spending and inflation data.

Germany and the eurozone are mired in an economic slowdown, which began in the second half of 2018 and shows no signs of ending anytime soon. The global trade war has dampened the demand for German and eurozone exports, and the manufacturing sectors have also been hurt. On Wednesday, ECB President Mario Draghi sounded pessimistic in his remarks about the economy. Draghi acknowledged that the economic slowdown which started in the second half of 2018 had extended into 2019. Draghi blamed uncertainty in the global economy, adding that “risks to the outlook remained tilted to the downside”. With weak conditions in the eurozone and Germany, the ECB is expected to remain dovish in its stance and keep a freeze on interest rates until 2020.

Global trade tensions have weighed on inflation levels in the developed economies, and the U.S. is no exception. However, with the Fed saying it will put a hold on rates until 2020, could that change? At the Fed policy meeting, policymakers lowered their inflation forecast for 2020, citing weakness in the Chinese and European economies. However, the chief economist of Credit Suisse, James Sweeney, has taken a different tack, saying that U.S. inflation could climb as high as 2.3% next year, in response to the lack of rate hikes. Sweeney said that although inflation remains below the Fed target of 2.0%, there are signs in the services sector of inflation picking up.

Muted response to news of trade talk progress

The Turkish delight that bites

EUR/USD Fundamentals

Thursday (March 28)

  • All Day – German Preliminary CPI. Estimate 0.6%
  • 4:00 Spanish Flash CPI. Estimate 1.4%. Actual 1.3%
  • 5:00 Eurozone M3 Money Supply. Estimate 3.9%. Actual 4.3%
  • 5:00 Eurozone Private Loans. Estimate 3.3%. Actual 3.3%
  • Tentative – Italian 10-year Bond Auction
  • 7:15 US FPMC Member Quarles Speaks
  • 8:30 US Final GDP. Estimate 2.4%
  • 8:30 US Final GDP Price Index. Estimate 1.8%
  • 8:30 US Unemployment Claims. Estimate 222K
  • 9:30 US FOMC Member Clarida Speaks
  • 9:30 US FOMC Member Bowman Speaks
  • 10:00 US Pending Home Sales. Estimate 0.1%
  • 10:30 US Natural Gas Storage. Estimate -43B
  • 17:20 FOMC Member Bullard Speaks

Friday (March 29)

  • 3:00 German Retail Sales. Estimate -1.0%
  • 3:45 French Consumer Spending. Estimate 0.2%
  • 3:45 French Preliminary CPI. Estimate 0.9%
  • 4:55 German Unemployment Change. Estimate -10K
  • 8:30 US Core PCE Price Index. Estimate 0.2%
  • 8:30 US Core Personal Spending. Estimate 0.3%
  • 9:45 Chicago PMI. Estimate 61.1
  • 10:00 UoM Revised Consumer Sentiment. Estimate 97.8

*All release times are DST

*Key events are in bold

EUR/USD for Thursday, March 28, 2019

EUR/USD for March 28 at 7:50 DST

Open: 1.1244 High: 1.1261 Low: 1.1234 Close: 1.1249

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1046 1.1120 1.1212 1.1300 1.1434 1.1553

EUR/USD ticked higher in the Asian session. The pair is showing stronger movement in European trade

  • 1.1212 is providing support
  • 1.1300 is the next resistance line
  • Current range: 1.1212 to 1.1300

Further levels in both directions:

  • Below: 1.1212, 1.1120 and 1.1046
  • Above: 1.1300, 1.1434, 1.1553 and 1.1610

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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