Euro Lower as German Preliminary GDP Misses Estimate

EUR/USD has edged lower on in the Tuesday session. Currently, the pair is trading at 1.1756, down 0.31% on the day. On the release front, there is just one euro zone indicator. German Preliminary GDP in the second quarter edged lower to 0.6%, missing the forecast of 0.7%. In the US, the key releases are Core Retail Sales and Retail Sales, which are expected to come in at 0.3% and 0.4% respectively. US Empire State Manufacturing Index is expected to improve to 10.1 points. On Wednesday, the euro zone releases Flash GDP. In the US, we’ll get a look at Building Permits and Housing Starts. As well, the FOMC releases its minutes from the July FOMC meeting.

It’s been a quiet August for the euro, but the currency has pushed upwards in recent months, with EUR/USD jumping 3.5% in July. The euro has received a boost from a stronger euro zone economy, as well as growing political risk in the United States, with the Trump administration failing to pass a new healthcare bill through Congress. The latest fiasco for Trump is the alt-right protest in Charlottesville, where one protester was killed by a suspected white supremacist. Trump initially refused to condemn white supremacists for the violence, and faced a strong backlash of criticism from both Democrat and Republican lawmakers. Trump finally came out with a statement on Monday which condemned hate groups, including white supremacists. Meanwhile, far away in the Korean peninsula, tensions between North Korea and the US have abated, after some serious saber-rattling which pushed global stock markets lower last week. European markets have started the week with gains, as the markets are hopeful that a diplomatic solution to the crisis will be found.

Germany’s economy has looked strong in 2017, and GDP expanded 0.6% in the second quarter. Consumer spending, a key driver of economic growth, continues to propel economic growth, and Germany has now posted 12 straight quarters of growth. Higher wages and increased government spending has also boosted the  economy. The export sector remains strong, despite the stronger euro, as global demand for German products, especially cars, remains firm. Positive economic conditions in Germany have translated into a stronger euro zone economy, which has experienced higher growth and lower unemployment.

Dollar Rallies as North Korea Blinks

EUR/USD Fundamentals

Tuesday (August 15)

  • 2:00 German Preliminary GDP. Estimate 0.7%. Actual 0.6%
  • 8:30 US Core Retail Sales. Estimate 0.3%
  • 8:30 US Retail Sales. Estimate 0.4%
  • 8:30 US Empire State Manufacturing Index. Estimate 10.1
  • 8:30 US Import Prices. Estimate 0.1%
  • 10:00 US Business Inventories. Estimate 0.4%
  • 10:00 US NAHB Housing Market Index. Estimate 64
  • 14:00 US TIC Long-Term Purchases. Estimate 28.3B

Wednesday (August 16)

  • 5:00 Eurozone Flash GDP. Estimate 0.6%
  • 8:30 US Building Permits. Estimate 1.25M
  • 8:30 US Housing Starts. Estimate 1.23M
  • 14:00 US FOMC Meeting Minutes

*All release times are GMT

*Key events are in bold

EUR/USD for Tuesday, August 15, 2017

EUR/USD Tuesday, August 15 at 6:30 EDT

Open: 1.1781 High: 1.1793 Low: 1.1721 Close: 1.1746

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1534 1.1616 1.1712 1.1876 1.1996 1.2108

EUR/USD was flat in the Asian session and has edged lower in European trade

  • 1.1712 is providing support
  • 1.1876 is the next resistance line

Further levels in both directions:

  • Below: 1.1712, 1.1616 and 1.1534
  • Above: 1.1876, 1.1996, 1.2108 and 1.2221
  • Current range: 1.1712 to 1.1876

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged in the Tuesday session. Currently, short positions have a majority (65%), indicative of EUR/USD continuing to move lower.

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.