Seeking Alpha

EUR/USD - Euro Unchanged, U.S. Jobless Claims Next

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Includes: DEUR, DRR, ERO, EUFX, EUO, FXE, UDN, UEUR, ULE, URR, USDU, UUP
by: Dean Popplewell

By Kenny Fisher

EUR/USD continues to show limited movement. On Thursday, the pair is trading at 1.2371, down 0.03% on the day. On the release front, the eurozone current account surplus dropped to EUR 35.1 billion, but beat the estimate of EUR 32.3 billion. In the US, unemployment claims are expected to drop to 230 thousand, and the Philly Fed Manufacturing Index is forecast to soften to 20.8 points. On Friday, there are no major events. Germany releases PPI and the Eurozone publishes consumer confidence.

Eurozone inflation improved in March, but still remains short of the ECB target of 2.0%. Final CPI came in at 1.3%, up from 1.1% a month earlier. Still, the reading fell short of the estimate of 1.4%. As long as inflation remains low, there will be little pressure on the ECB to tighten its accommodative monetary policy. The ECB's stimulus program is scheduled to wind up in September, but an increase in interest rates is unlikely before 2019.

The well-respected ZEW Economic Sentiment releases were a disappointment earlier this week. The April reports in Germany and the eurozone were much weaker than expected, but investors shrugged off the numbers as risk appetite has improved. The German release of -8.2 points showed pessimism on the part of institutional investors and analysts and marked the weakest reading since November 2012. The eurozone reading of 1.9 was the lowest since July 2016. The German and eurozone economies remain solid, making these weak readings all the more surprising. Investors will be hoping that these ZEW releases are one-time blips and that the May readings will be in line with recent releases.

EUR/USD Fundamentals

Thursday (April 19)

  • 4:00 Eurozone Current Account. Estimate 32.3B. Actual 35.1B
  • 4:44 Spanish 10-y Bond Auction. Actual 1.24%
  • 8:00 US FOMC Brainard Speaks
  • 8:30 US Philly Fed Manufacturing Index. Estimate 20.8
  • 8:30 US Unemployment Claims. Estimate 230K
  • 9:30 US FOMC Member Randal Quarles Speaks
  • 10:00 US CB Leading Index. Estimate 0.3%
  • 10:30 US Natural Gas Storage. Estimate -23B
  • 18:45 US FOMC Member Loretta Mester Speaks

Friday (April 20)

  • 2:00 German PPI. Estimate 0.2%
  • 7:30 German Buba President Weidmann Speaks
  • 10:00 Eurozone Consumer Confidence. Estimate 0

*All release times are DST

*Key events are in bold

EUR/USD for Thursday, April 19, 2018

EUR/USD for April 19 at 6:55 DST

Open: 1.2374 High: 1.2400 Low: 1.2354 Close: 1.2371

EUR/USD Technical

S1

S2

S1

R1

R2

R3

1.2092

1.2235

1.2319

1.2460

1.2581

1.2662

EUR/USD was flat in the Asian session. The pair edged higher in European trade but has given up these gains.

  • 1.2319 is providing support
  • 1.2460 is the next resistance line

Further levels in both directions:

  • Below: 1.2319, 1.2235, 1.2092 and 1.2025
  • Above: 1.2460, 1.2581 and 1.2662
  • Current range: 1.2319 to 1.2460

OANDA's Open Positions Ratio

EUR/USD ratio is showing movement towards short positions. Currently, short positions have a majority (60%), indicative of EUR/USD breaking out and moving to lower ground.