EUR/USD – Euro subdued in data-light session, Fed minutes next

EUR/USD has ticked higher on Wednesday. Currently, the pair is trading at 1.1171, up 0.08% on the day. On the release front, there are no major German or eurozone events. It’s a quiet day in the U.S. as well. Today’s highlight is the minutes of the Federal Reserve’s policy meeting earlier in May. Thursday will be busy, as Germany releases GDP and Ifo Business Climate. The eurozone and Germany release service and manufacturing PMIs, while the ECB posts the minutes of the April meeting. The U.S. releases unemployment claims.

With a dearth of data so far this week, it’s no surprise that the euro has shown a lack of movement. The currency could get a wake-up call, starting with the release of the Fed minutes later in the day. At the May meeting, the Federal Reserve maintained the benchmark rate for a fourth straight month. The rate statement noted that inflation pressures remain muted and that the FOMC would remain patient regarding future rate movements. Jerome Powell reinforced this stance after the meeting, saying that “we don’t see a strong case for moving in either direction”. Will the minutes point to any bias regarding the next rate move? The Fed is already on record as saying it does not expect to raise rates before 2020, and with inflation levels persistently below the Fed’s target of 2.0%, the Fed can afford to continue its wait-and-see stance.

It’s election time in the European Union, as the bloc contends with an economic slowdown and the U.K’s imminent departure. Voters head to the polls for a 4-day election, beginning on Thursday, to elect members to the European Parliament. 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.

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EUR/USD Fundamentals

Wednesday (May 22)

  • 1:00 US FOMC Member Bullard Speaks
  • 3:38 ECB President Draghi Speaks
  • 5:34 German 10-year Bond Auction. Actual -0.07/1.8
  • 10:00 US FOMC Member Williams Speaks
  • 10:30 US Crude Oil Inventories. Estimate -1.2M
  • 14:00 US FOMC Meeting Minutes

Thursday (May 23)

  • 2:00 German Final GDP. Estimate 0.4%
  • 3:30 German Flash Manufacturing PMI. Estimate 44.9
  • 3:30 German Flash Services PMI. Estimate 55.2
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 48.2
  • 4:00 Eurozone Flash Services PMI. Estimate 53.0
  • 4:00 German Ifo Business Climate. Estimate 99.2
  • 4:00 ECB Financial Stability Review
  • Day 1 – European Parliamentary Elections
  • 7:30 ECB Monetary Policy Meeting Accounts
  • 8:30 US Unemployment Claims. Estimate 215K

*All release times are DST

*Key events are in bold

EUR/USD for Wednesday, May 22, 2019

EUR/USD for May 22 at 6:30 DST

Open: 1.1161 High: 1.1174 Low: 1.1149 Close: 1.1171

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0950 1.1046 1.1120 1.1212 1.1300 1.1434

EUR/USD was mostly flat in the Asian session. In European trade, the pair posted small losses but has reversed directions and moved higher

  • 1.1120 is providing support
  • 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

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.