EUR/USD has posted slight losses on Tuesday. Currently, the pair is trading at 1.1148, down 0.16% on the day. On the release front, the eurozone releases consumer confidence is expected to post a weak score of -8. In the U.S., existing home sales is projected to climb sharply to 5.35 million.
Voters in all 28 members of the European Union will head to the polls for a 4-day election, beginning on Thursday, to elect members to the European Parliament. Election turnout has been on the decline, with only 43% of eligible voters casting a vote in 2014. Key issues include the economic slowdown, the migrant crisis and the rise in Euroskpeticism. Euro-skeptics increased their representation in parliament from 12% to 25% in the last election, and with the dramatic increase in strength of populist parties, this trend could well continue. A strong showing by parties with an anti-EU agenda could weaken the euro. As well, the outcome of the vote could have an impact on the choice of the new head of the ECB, as Mario Draghi steps down in October, after an eight-year term.
The eurozone remains mired in a slowdown, and the German locomotive has also lost a step. Still, there was positive news in Germany and the eurozone last week, as GDP and inflation headed upwards. German Preliminary GDP improved to 0.4% in the first quarter, after a flat zero reading in Q4 of 2018. In the eurozone, Flash GDP also climbed to 0.4% in the first quarter, up from 0.2% in Q4. On the inflation front, inflation indicators impressed, with sharp gains in April. Final CPI climbed 1.7%, matching the forecast. This was up sharply from 0.8% in March. Final Core CPI rose 1.3%, edging above the estimate of 1.2%. This marked the strongest gain since March 2013. The ECB recently stated that it had no plans to raise interest rates prior to the spring of 2020, but if GDP and inflation numbers continue to improve, the ECB could raise rates earlier than this timeline.
Tuesday (May 21)
- 10:00 Eurozone Consumer Confidence. Estimate -8
- 10:00 US Existing Home Sales. Estimate 5.35M
- 10:45 US FOMC Member Evans Speaks
- 12:00 US FOMC Member Rosengren Speaks
Wednesday (May 22)
- 14:00 US FOMC Meeting Minutes
*All release times are DST
*Key events are in bold
EUR/USD for Tuesday, May 21, 2019
EUR/USD for May 21 at 5:50 DST
Open: 1.1166 High: 1.1172 Low: 1.1142 Close: 1.1148
EUR/USD was mostly flat in the Asian session and has edged lower in European trade
- 1.1120 is a weak support level
- 1.1212 is the next resistance line
- Current range: 1.1120 to 1.1212
Further levels in both directions:
- Below: 1.1120, 1.1046 and 1.0950
- Above: 1.1212, 1.1300, 1.1434 and 1.1553
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