EUR/USD – Euro Unchanged, ECB Minutes Next

EUR/USD is trading sideways in the Thursday session. Currently, EUR/USD is trading at 1.1947, down 0.01% on the day. On the release front, Eurozone Industrial Production posted a strong gain of 1.0%, above the estimate of 0.8%. Later in the day, ECB will release the minutes of the December policy meeting. In the US, PPI and Core PPI are expected to soften to 0.2%, and unemployment claims is forecast to drop to 246 thousand. On Friday, the US releases key consumer indicators for December, with the release of CPI and retail sales reports.

An interest rate increase from the ECB? That kind of language hasn’t been bandied about for years – the last time that the ECB raised rates was in 2011.  However, there is growing speculation that the Bank could raise rates, if it decides to terminate its massive stimulus program (QE) in September. This month, the ECB started its taper of the program, reducing monthly purchases from EUR 60 billion to EUR 30 billion. With the eurozone economy continuing to perform well, the ECB has been sending out signals that the stimulus program could end in 2018. On December 30, Benoit Coeure, who is in charge of the program, said on Dec. 30 there was a “reasonable chance” it would not be extended. On Sunday, Bundesbank President Jens Weidmann said the ECB should set a date to end QE.

The unemployment rate in the eurozone declined steadily in 2017, and the December reading dropped to 8.7%. This marked its lowest level since March 2009, when the rate stood at 8.5%. This is yet another indication of the impressive rebound in the eurozone economy, as growth has been steady and the employment picture has improved. Retail Sales, the primary gauge of consumer spending, posted a strong gain of 1.5% in December, after a decline of 1.1% in November. The euro has received a boost from the strong numbers, gaining 2.7% since November 1. Fourth-quarter numbers have been solid, and the positive trend is expected to continue in early 2018.

EUR/USD Fundamentals

Thursday (January 11)

  • 4:03 Italian Retail Sales. Estimate 0.8%. Actual 1.1%
  • 5:00 Eurozone Industrial Production. Estimate 0.8%. Actual 1.0%
  • 7:30 ECB Monetary Policy Meeting Accounts
  • 8:30 US PPI. Estimate 0.2%
  • 8:30 US Core PPI. Estimate 0.2%
  • 8:30 US Unemployment Claims. Estimate 246K
  • Tentative – IBD/TIPP Economic Optimism. Estimate 52.3
  • 10:30 US Natural Gas Storage. Estimate -318B
  • 13:01 US 30-year Bond Auction
  • 14:00 US Federal Budget Balance. Estimate -34.5B
  • 15:30 US FOMC Member William Dudley Speaks

Friday (January 12)

  • 2:45 French Final CPI. Estimate 0.3%
  • 4:00 Italian Industrial Production. Estimate 0.6%
  • 8:30 US CPI. Estimate 0.1%
  • 8:30 US Core CPI. Estimate 0.2%
  • 8:30 US Core Retail Sales. Estimate 0.4%
  • 8:30 US Retail Sales. Estimate 0.5%
  • 10:00 US Business Inventories. Estimate 0.3%
  • 11:30 German Buba President Weidmann Speaks

*All release times are GMT

*Key events are in bold

 

EUR/USD for Thursday, January 11, 2018

EUR/USD for January 11 at 6:15 EDT

Open: 1.1948 High: 1.1970 Low: 1.1929 Close: 1.1947

 

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1657 1.1777 1.1876 1.1961 1.2092 1.2221

EUR/USD has shown little movement in the Asian and Europeans sessions

  • 1.1876 is providing support
  • 1.1961 was tested earlier in resistance. It is a weak line

Further levels in both directions:

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

OANDA’s Open Positions Ratio

EUR/USD ratio is showing movement towards long positions. Currently, short positions have a majority (60%), 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

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.