EUR/USD – Euro Steady, US Durables Next

EUR/USD is subdued on Wednesday, as the pair trades at 1.0930 in the European session. Taking a look at economic news, French Consumer Spending posted a second straight decline, coming in at -1.1%. Today’s key event is US Core Durable Goods Orders. The markets are expecting a weak gain of 0.1% in the November report.

After months of standing on the sidelines, the Federal Reserve finally pressed the rate trigger, raising interest rates by 0.25 percent, the first rate hike since June 2006. The Fed dropped a broad hint in its October policy meeting about a rate hike before the end of 2015, and predictably, investors and traders were busy trying to guess whether the Fed would indeed press the rate trigger. To the credit of Fed chief Janet Yellen and her colleagues, the Fed put into place a carefully-crafted strategy, sending a steady of stream of signals that it was intending to tighten monetary policy, if economic conditions remained positive. This gave the markets ample time to price in a rate hike, and currency market volatility was not excessive after the US rate hike, the first in almost 10 years. Although a hike of 0.25 percent is expected to have limited economic impact, the Fed move has given the US economy a critical vote of confidence, and this will be duly noted by the global markets. As well, this move is expected to be the first in a series of incremental rate hikes over the course of 2016, and higher interest rates means that the US dollar will become even more attractive to investors, at the expense of other currencies, such as the euro.

It’s been a volatile third quarter for EUR/USD. Starting in late October, the euro was in free-fall, dropping a remarkable 800 points in just six weeks. However, the continental currency turned things around in remarkable fashion in early December, following the ECB decision not to implement further easing moves, despite hints from ECB head Mario Draghi that he was prepared to take drastic action to kick-start the moribund Eurozone economy. The markets were caught off guard by the ECB standing on the sidelines, and the euro surged 300 points in the aftermath of the ECB announcement. Since then, the euro has been generally stable, holding its own against the US dollar, despite the historic rate hike by the Federal Reserve last week.

EUR/USD Fundamentals

Wednesday (Dec. 23)

  • 00:50 US Personal Spending. Estimate 0.3%. Actual 0.3%
  • 7:45 French Consumer Spending. Estimate +0.2%. Actual -1.1%
  • 10:00 Italian Retail Sales. Estimate 0.3%
  • 13:30 US Core Durable Goods Orders. Estimate 0.1%
  • 13:30 US Core PCE Price Index. Estimate 0.1%
  • 13:30 US Durable Goods Orders. Estimate -0.6%
  • 13:30 US Personal Income. Estimate 0.2%
  • 15:00 US New Home Sales. Estimate 507K
  • 15:00 US Revised UoM Consumer Sentiment. Estimate 92.1 points
  • 15:00 US Revised UoM Inflation Expectations
  • 15:30 US Crude Oil Inventories. Estimate 1.4M

Thursday (Dec. 24)

Upcoming Key Events

13:30 US Unemployment Claims. Estimate 270K

*Key releases are highlighted in bold

*All release times are GMT

EUR/USD for Wednesday, December 23, 2015

EUR/USD December 23 at 9:35 GMT

EUR/USD 1.0932  H: 1.0953 L: 1.0915

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0659 1.0732 1.0847 1.0941 1.1087 1.1172
  • EUR/USD has showed limited movement in the Asian and European sessions.
  • 1.0847 is providing support.
  • 1.0941 is a weak resistance line
  • Current range: 1.0847 to 1.0941

Further levels in both directions:

  • Below: 1.0847, 1.0732, 1.0659 and 1.0550
  • Above: 1.0941, 1.1087 and 1.1172

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged, reflective of the lack of movement from the pair. Short positions command a strong majority (61%). This is indicative of trader bias towards the euro losing ground.

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 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.