EUR/USD is showing marginal movement on Tuesday, continuing the lack of movement which marked the pair in the Monday session. The pair is trading at 1.1320 in the European session. On the release front, Eurozone Current Account fell sharply to EUR 19.0 billion, short of expectations. Next, Eurozone and Germany release the important ZEW Economic Sentiment reports, which should be treated as market-movers. In the US, we’ll get a look at Building Permits and Housing Starts.
Despite strong efforts, the ECB has been unable to raise anemic inflation levels gripping the Eurozone economy. This has left the threat of deflation as a constant worry for policymakers. Last week, there were some positive inflation numbers from the two largest economies in the bloc, Germany and France. Eurozone Final CPI also improved in March, but only to a flat level of 0.0% Inflation remains well below the ECB target of about 2.0%, despite significant monetary moves by the central bank in March, such as cutting interest rates and expanding the ECB asset-purchase program. In March, Mario Draghi stated that the ECB would not lower interest rates anytime soon, which would leave the ECB with limited monetary options. The ECB holds a policy meeting on April 21. Even if the ECB remains on the sidelines, the markets will be giving ECB head Mario Draghi their full attention, as his comments following the ECB statement can quickly inject volatility into the currency markets.
The US economy continues to perform well, despite some weak sectors, such as the manufacturing industry. US manufacturers continue to face stiff competition with countries that pay much lower wages, such as China, India, and other Asian countries. With turbulent global economic conditions leading to weaker demand, the manufacturing sector is facing additional challenges. There was some positive news on Friday, as the Empire State Manufacturing Index climbed 9.6 points in April, crushing the estimate of 2.1 points. It was the indicator’s highest level since January 2015. We’ll get a look at the Philly Fed Manufacturing Index, a key manufacturing report, on Thursday.
EUR/USD Fundamentals
Tuesday (April 19)
- 8:00 Eurozone Current Account. Estimate 21.3B. Actual 19.0B
- 9:00 German ZEW Economic Sentiment. Estimate 13.9
- 9:00 Eurozone ZEW Economic Sentiment. Estimate 8.2
- 12:30 US Building Permits. Estimate 1.20M
- 12:30 US Housing Starts. Estimate 1.17M
Upcoming Key Events
Wednesday (April 20)
- 14:00 US Existing Home Sales. Estimate 5.29M
*Key events are in bold
*All release times are GMT
EUR/USD for Tuesday, April 19, 2016
EUR/USD April 19 at 8:10 GMT
Open: 1.1307 Low: 1.1303 High: 1.1349 Close: 1.1327
EUR/USD Technical
| S1 | S2 | S1 | R1 | R2 | R3 |
| 1.1087 | 1.172 | 1.1278 | 1.1378 | 1.1495 | 1.1609 |
- EUR/USD has shown limited movement in the Asian and European sessions
- There is resistance at 1.1378
- 1.1278 remains a weak support line
Further levels in both directions:
- Below: 1.1278, 1.1172, 1.1087 and 1.0989
- Above: 1.1378, 1.1495 and 1.1609
- Current range: 1.1172 to 1.1278
OANDA’s Open Positions Ratio
EUR/USD ratio remains unchanged this week. Long positions continue to command a strong majority (60%). This is indicative of strong trader bias towards EUR/USD breaking out and moving to lower levels.