EUR/USD – Euro gains ground, Eurozone consumer confidence ahead

EUR/USD has posted slight gains in the Thursday session. Currently, the pair is trading at 1.1694, up 0.28% on the day. On the release front, the eurozone releases consumer confidence, which is expected to post a decline of -2 for a second straight month. In the U.S, the Philly Fed Manufacturing Index is expected to jump to 17.5 points, while unemployment claims are forecast to climb to 210 thousand. On Friday, Germany and the eurozone release manufacturing PMIs.

U.S President Trump has fired another tariff salvo, and the Chinese have vowed to retaliate. This has become an all-too familiar script, which was repeated on Monday, as the U.S announced 10% tariffs on some $200 billion worth of Chinese goods. Only this time, investors didn’t panic and the euro and other currencies have held their own against the greenback. Why have the currency markets reacted so calmly? Investors appeared to have been ready for a move by Trump, and may be sighing in relief that the tariff was set at 10% rather than at 25%. One senior economist summed up Trump’s most recent salvo as “bad but manageable”. However, if the Chinese do indeed retaliate and the U.S takes further measures, this would likely shake up the currency markets and boost the U.S dollar.

U.S construction numbers were a mixed bag on Wednesday. Building Permits disappointed, dropping from 1.31 million to 1.23 million. This was well short of the estimate of 1.31 million and marked the weakest gain since September. There was better news from Housing Starts, which jumped from 1.17 million to 1.28 million, above the estimate of 1.24 million. This was a three-month high. On Thursday, we’ll get a look at Existing Home Sales, which has been on a nasty downtrend, losing ground for four straight months. The indicator is expected to improve slightly, to 5.36 million.

Kiwi jumps on strongest growth in two years

EUR/USD Fundamentals

Thursday (September 20)

  • Tentative – Spanish 10-year Bond Auction
  • 8:30 US Philly Fed Manufacturing Index. Estimate 17.5
  • 8:30 US Unemployment Claims. Estimate 210K
  • 10:00 Eurozone Consumer Confidence. Estimate -2
  • 10:00 US CB Leading Index. Estimate 0.5%
  • 10:00 US Existing Home Sales. Estimate 5.36M
  • 10:30 US Natural Gas Storage. Estimate 81B
  • 11:15 German Buba President Weidmann Speaks

Friday (September 21)

  • 3:30 German Flash Manufacturing PMI. Estimate 55.7
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 54.4

*All release times are DST

*Key events are in bold

EUR/USD for Thursday, September 20, 2018

EUR/USD for September 20 at 4:45 DST

Open: 1.1673 High: 1.1709 Low: 1.1669 Close: 1.1694

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1434 1.1553 1.1637 1.1718 1.1840 1.1961

EUR/USD ticked higher in the Asian session but then retracted. The pair has posted small gains in European trade

  • 1.1637 is providing support
  • 1.1718 is the next resistance line

Further levels in both directions:

  • Below: 1.1637, 1.1553, 1.1434 and 1.1312
  • Above: 1.1718, 1.1840 and 1.1961
  • Current range: 1.1637 to 1.1718

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.