EUR/USD – Euro jumps to 3-week high as German inflation remains steady

EUR/USD has reversed directions in the Friday session, after slight losses in the Thursday session. Currently, the pair is trading at 1.1311, up 0.50% on the day. On the release front, there are no major German or eurozone events. The German Wholesale Price Index remained steady in March, with a gain of 0.3%. Eurozone industrial production declined by 0.2%, above the estimate of -0.5%. In the U.S., UoM consumer sentiment is expected to improve to 98.1. As well, the Treasury department releases its semi-annual currency report.

U.S. inflation numbers showed improvement in March. CPI climbed to 0.4%, its highest gain since January 2018. The producer price index also looked strong, climbing 0.6%, a 5-month high. Inflation remains well below the Federal Reserve target of 2.0%, but stronger inflation numbers will bolster the case of Fed officials who favor raising rates in 2019 if the economic outlook improves. The Fed minutes from the March meeting left the door open to further rate hikes this year, but current market pricing suggests no hikes until 2020, and some analysts are expecting a cut in rates later this year.

There were no surprises from the ECB policy meeting, and the euro responded with limited movement. The bank held the minimum bid rate at 0.00%, where it has been pegged since 2016. Investors were more interested in Mario Draghi’s comments after the rate decision. Draghi acknowledged that eurozone economic data remains weak, particularly in the manufacturing sector. The economic outlook remains weak, with Draghi saying that “slower growth momentum is expected to extend into the current year”. At the same time, Draghi said that the likelihood of a recession remains low. On the inflation front, Draghi stated that interest rates will remain at current levels at least until the end of 2019 and possibly later.

EUR/USD Fundamentals

Friday (April 12)

  • 2:00 German WPI. Actual 0.3%
  • 5:00 Eurozone Industrial Production. Estimate -0.5%. Actual -0.2%
  • 8:30 US Import Prices. Estimate 0.4%
  • 10:00 US UoM Consumer Sentiment. Estimate 98.1
  • 10:00 US UoM Inflation Expectations
  • Tentative – US Treasury Currency Report

*All release times are DST

*Key events are in bold

EUR/USD for Friday, April 12, 2019

EUR/USD for April 12 at 6:50 DST

Open: 1.1254 High: 1.1309 Low: 1.1254 Close: 1.1311

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1120 1.1212 1.1300 1.1434 1.1553 1.1622

EUR/USD edged higher in the Asian session and the upward movement continues in European trade

  • 1.1300 has switched to a support role after strong gains by EUR/USD on Friday. It is a weak line
  • 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 1.1046
  • Above: 1.1434, 1.1553 and 1.1622

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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