EUR/USD – Euro Unchanged as Eurozone Flash GDP Matches Estimate

EUR/USD is unchanged in the Wednesday session. Currently, the pair is trading at 1.1715, down 0.20% on the day. On the release front, euro zone Flash GDP edged up to 0.6% in the second quarter, matching the forecast. In the US, the focus will be on housing data, with the release of Building Permits and Housing Starts. Both indicators are expected to remain unchanged from their previous readings. As well, the FOMC will release the minutes of its July policy meeting. On Thursday, the euro zone releases Final CPI and the ECB publishes the minutes of its July meeting. In the US, the key events are unemployment claims and the Philly Fed Manufacturing Index.

The euro zone economy has now picked up speed over three straight quarters. In the second quarter, euro zone Flash GDP posted a gain of 0.6%, slightly stronger than the 0.5% reading in Q1. Much of the credit for improved growth in the euro zone must be given to Germany, the largest economy in the bloc and the star performer. Germany’s 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 have also boosted the economy. The export sector remains strong, despite the stronger euro, as global demand for German products, especially automobiles, remains firm. Positive economic conditions in Germany have translated into a stronger euro zone economy, which has experienced higher growth and lower unemployment.

The euro has taken a pause in August, but the currency has posted impressive gains 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, as the Trump administration has lurched from crisis to crisis, and hasn’t managed to pass a single major bill through Congress. The latest fiasco for Trump was 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. However, the brash president followed up on Tuesday by again blaming both sides in Charlottesville, raising questions about Trump’s reluctance to unequivocally condemn hate group such as white supremacists.

ECB signals no shift likely at Jackson Hole

EUR/USD Fundamentals

Wednesday (August 16)

  • 4:00 Italian Preliminary GDP. Estimate 0.4%. Actual 0.4%
  • 5:00 Euro zone Flash GDP. Estimate 0.6%. Actual 0.6%
  • 8:30 US Building Permits. Estimate 1.25M
  • 8:30 US Housing Starts. Estimate 1.22M
  • 10:30 US Crude Oil Inventories. Estimate -3.0M
  • 14:00 US FOMC Meeting Minutes

Thursday (August 17)

  • 5:00 Eurozone Final CPI. Estimate 1.3%
  • 7:30 ECB Monetary Policy Meeting Accounts
  • 8:30 US Unemployment Claims. Estimate 240K
  • 8:30 US Philly Fed Manufacturing Index. Estimate 18.3

*All release times are GMT

*Key events are in bold

EUR/USD for Wednesday, August 16, 2017

EUR/USD Wednesday, August 16 at 6:10 EDT

Open: 1.1734 High: 1.1758 Low: 1.1691 Close: 1.1715

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. In European trade, the pair edged lower but has recovered

  • 1.1712 was tested earlier in support and is a weak line
  • 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 showing little movement in the Wednesday session. Currently, short positions have a majority (67%), indicative of EUR/USD breaking out and moving 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 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.