EURUSD – Expect a Quiet Day as US Closed for Presidents’ Day

The euro has paused on Monday, after strong losses on Friday. Currently, the pair is trading at 1.2420, up 0.08% on the day. On the release front, the eurozone current account surplus narrowed to EUR 29.9 billion, short of the estimate of EUR 30.5 billion. There are no US indicators, as US markets are closed for Presidents’ Day. On Tuesday, Germany releases ZEW Economic Sentiment and the eurozone will publish releases Consumer Confidence.

The euro lost close to 1% on Friday, as the US posted sharp housing and consumer confidence reports. Building Permits jumped to 1.40 million in January, up from 1.30 million in December. This easily beat the estimate of 1.29 million. Housing Starts followed suit and improved to 1.33 million in January, up from 1.19 million a month earlier. This was well above the forecast of 1.28 million. There was more positive news from consumer confidence, as UoM Consumer Confidence climbed to 99.9, well above the estimate of 95.4 points. This marked a 4-month high.

The recent turbulence in the global stock markets has triggered strong volatility in the currency markets, and ECB President Mario Draghi recently stated that the ECB was concerned about the euro’s sharp fluctuations. Last week, Draghi weighed in on Bitcoin, a cryptocurrency which has seen wild fluctuations in recent months. There are growing calls for regulation of these currencies, and central banks could play a key role in such regulation. However, Draghi poured cold water on any ECB involvement, saying that it was not the ECB’s responsibility to ban or regulate Bitcoin. Draghi added that the ECB was exploring the use of blockchain, a digital technology to monitor bitcoin transactions.

EUR/USD Fundamentals

• 4:00 Eurozone Current Account. Estimate 30.5B. Actual 29.9B

• All Day – Eurogroup Meetings

• 6:00 German Buba Monthly Report

• 5:00 German ZEW Economic Sentiment. Estimate 16.5

• 5:00 Eurozone ZEW Economic Sentiment. Estimate 28.4

• 10:00 Eurozone Consumer Confidence. Estimate 1

Open: 1.2410 High: 1.2435 Low: 1.2387 Close: 1.2420

EUR/USD Technical

S1	S2	S1	R1	R2	R3
1.2200	1.2286	1.2357	1.2481	1.2569	1.2660

EUR/USD posted slight gains but retracted in the Asian session. The pair is showing little movement in European trade

• 1.2357 is providing support

• 1.2481 switched to resistance role after sharp losses by the pair on Friday

Further levels in both directions:

• Below: 1.2357, 1.2286 and 1.2200

• Above: 1.2481, 1.2569, 1.2660 and 1.2751

• Current range: 1.2357 to 1.2481