EUR/USD has posted slight losses on Wednesday, as the pair trades just below the 1.12 line in the European session. On the release front, there are no major events in the Eurozone. In the US, today’s key event is New Home Sales.
As the largest economy in the Eurozone, German indicators are closely monitored. Germany released a host of releases on Monday, painting a mixed picture. PMI reports pointed to moderate expansion in the services sector, but almost no growth in the manufacturing industry, which has been hard-hit by the Chinese slowdown. German Ifo Business Climate improved to 106.7 points, beating expectations. ZEW Economic Sentiment improved to 4.3 points, but this was well short of the estimate of 6.3 points. The attacks in Brussels have predictably caused concern in the financial markets, but any effects on the currency markets will likely be minimal.
Will the real Federal Reserve please stand up? Last week’s Federal Reserve policy statement appeared to pour cold water on any imminent rate hikes, but “not so fast”, according to two Federal Reserve officials. On Monday, John Williams, president of the San Francisco Fed, said that the Fed could raise rates in April and June, if economic conditions improve. Although the dot plot (an FOMC projection of rate hikes) was lowered at the March meeting, he insisted that the Fed had not changed its path of rate hikes. His comments were echoed by Atlanta Fed Dennis Lockhart, who also said that an April rate move was a clear possibility. Lockhart noted that the US economy was holding up well, despite weak global conditions. Lockart said that the economy was close to full employment and the Fed’s target of 2 percent inflation was attainable. However, it should be kept in mind that neither Willams nor Lockhart is a voting member of the FOMC.
EUR/USD Fundamentals
Wednesday (March 23)
- Tentative – German 30-Year Bond Auction
- 13:40 German Buba President Jens Weidmann
- 14:00 US FOMC Member James Bullard Speaks
- 15:00 Belgian NBB Business Climate. Estimate -6.0 points
- 15:00 US New Home Sales. Estimate 512K
- 15:30 US Crude Oil Inventories. Estimate 2.5M
Upcoming Key Events
Thursday (March 24)
- 11:15 Eurozone Targeted LTRO
- 13:30 US Core Durable Goods Orders. Estimate -0.2%
- 13:30 US Unemployment Claims. Estimate 267K
*Key events are in bold
*All release times are GMT
EUR/USD for Wednesday, March 23, 2016
EUR/USD March 23 at 10:15 GMT
Open: 1.1221 Low: 1.1179 High: 1.1221 Close: 1.1187
EUR/USD Technical
| S1 | S2 | S1 | R1 | R2 | R3 |
| 1.0941 | 1.1087 | 1.1172 | 1.1278 | 1.1387 | 1.1495 |
- EUR/USD has shown marginal movement in the Asian and European sessions
- There is resistance at 1.1278
- 1.1172 is under strong pressure in support
Further levels in both directions:
- Below: 1.1172, 1.1087, 1.0941 and 1.0847
- Above: 1.1278, 1.1387, 1.1495, and 1.1638
- Current range: 1.1172 to 1.1278
OANDA’s Open Positions Ratio
EUR/USD ratio is unchanged, consistent with the lack of movement from EUR/USD. Short positions have a strong majority (61%), which is indicative of strong trader bias towards EUR/USD continuing to head to lower levels.