Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

EUR/USD Steady, Shrugs Off Weak CPI Report

Published 03/16/2018, 06:55 AM
Updated 03/05/2019, 07:15 AM

EUR/USD has posted gains in the Friday session. Currently, the pair is trading at 1.2329, up 0.20% on the day. On the release front, German Wholesale Price Index declined 0.3%, missing the estimate of +0.2%. Eurozone Final CPI also disappointing, as the reading of 1.1% was shy of the forecast of 1.3%. In the US, key indicators are expected to slow, which could weigh on the US dollar during the North American session. Building Permits and Housing Starts are forecast to drop to 1.32 million and 1.29 million respectively. The markets are also bracing for a drop in UoM Consumer Sentiment, which is expected to slow to 99.2 points.

The eurozone economy has been on the rebound, but inflation levels still remain well short of the ECB target of just under 2 percent. In fact, Eurozone Final CPI has been dropping in recent months, and this worrisome trend continued in February, when the indicator dropped to 1.1%, down from 1.3% a month earlier. This marked the weakest gain since December 2016. On Wednesday, inflation was on the mind of ECB President Mario Draghi, who expressed caution about inflation. Draghi said that the ECB still needed to see evidence that inflation was gaining strength before there could be any talk about a change in monetary policy. In the meantime, the ECB would remain “patient, persistent and prudent”. Stronger economic conditions have led to growing speculation that the ECB will wind up its stimulus program in September. However, there is still plenty of slack in the economy, and coupled with low inflation, Draghi can afford to remain cautious and maintain current monetary policy for some time.

German Chancellor Angela Merkel was elected to a fourth term on Wednesday, but this time she stumbled over the finish line, as opposed to previous wins, when she cruised to victory. Merkel’s stature has diminished after a poor showing in the election back in September, and she will preside over a fractured coalition. Merkel was forced to give the socialist SDP the finance and foreign ministry portfolios, so we can expect the new government to be more supportive of eurozone integration, including assistance for weaker eurozone members.

EUR/USD Fundamentals

Friday (March 16)

*Key events are in bold

EUR/USD for Friday, March 16, 2018

EUR/USD Chart for March 15-16, 2018

EUR/USD for March 15 at 6:10 EDT

Open: 1.2305 High: 1.2336 Low: 1.2295 Close: 1.2329

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.2092 1.2200 1.2286 1.2357 1.2460 1.2581

EUR/USD was flat in the Asian session and has ticked higher in European trade

  • 1.2286 is providing support
  • 1.2357 is the next resistance line

Further levels in both directions:

  • Below: 1.2286, 1.2200 and 1.2092
  • Above: 1.2357, 1.2460, 1.2581 and 1.2660
  • Current range: 1.2286 to 1.2357

OANDA’s Open Positions Ratio

EUR/USD ratio is almost unchanged in the Friday session. Currently, short positions have a majority (58%), indicative of EUR/USD reversing directions and moving to lower ground.

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.