EUR/USD – Euro Pushes to 13-Week High, German CPI Next

EUR/USD continues to rally, as the pair trades at its highest level since September 22. In Friday trade, EUR/USD is trading at 1.1980, up 0.33% on the day. The final trading day of 2017 has just one key event, German Preliminary CPI. The indicator is expected to accelerate to 0.5% in December. In the eurozone, M3 Money Supply and Private Loans both matched their estimates of 4.9% and 2.8%, respectively.

Christmas week is traditionally light on economic releases and the markets are in slow gear until after New Years’. Still, the euro has looked sharp and is up about 1.0% this week, with the symbolic 1.20 line in striking distance. The US dollar has been under pressure, and disappointing consumer confidence and unemployment numbers didn’t help the cause. We could see the greenback rebound in January, as the US economy continues to show strong growth and the Federal Reserve is widely expected to raise rates for a second straight month at its January policy meeting.

In a nod to stronger economic conditions in the eurozone, the ECB announced in October that it would begin tapering its monthly bond purchases in January, from EUR 60 billion to 30 billion. Mario Draghi & Co. are playing it safe, however, as the ECB has extended the purchases through September 2018. If inflation remains below the ECB target of around 2.0%, the purchases will likely continue after that date. Economic growth in the bloc has been steady, with GDP expanding 0.7% in the third quarter, after a 0.6% in the second quarter. Of note, the ECB upwardly revised its 2018 growth forecast from 1.8% to 2.3%.

 

Friday (December 29)

  • All Day – German Preliminary CPI. Estimate 0.5%
  • 3:00 Spanish Flash CPI. Estimate 1.5%. Actual 1.2%
  • 4:00 Eurozone M3 Money Supply. Estimate 4.9%. Actual 4.9%
  • 4:00 Eurozone Private Loans. Estimate 2.8%. Actual 2.8%

*All release times are GMT

*Key events are in bold

 

EUR/USD for Friday, December 29, 2017

EUR/USD for December 29 at 5:10 EDT

Open: 1.1943 High: 1.1965 Low: 1.1936 Close: 1.1980

 

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1777 1.1876 1.1961 1.2092 1.2222 1.2357

EUR/USD inched higher in the Asian session and has posted slight gains in European trade

  • 1.1961 has switched to a support level after gains by the pair on Friday. This line remains under pressure
  • 1.2092 is the next resistance line. It has held firm since early September

Further levels in both directions:

  • Below: 1.1961, 1.1876, 1.1777 and 1.1657
  • Above: 1.2092, 1.2221 and 1.2357
  • Current range: 1.1961 to 1.2092

OANDA’s Open Positions Ratio

EUR/USD ratio is almost unchanged in the Friday session. Currently, short positions have a majority (64%), indicative of EUR/USD reversing directions and moving downwards.

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.