EUR/USD – Euro remains subdued as German CPI matches forecast

EUR/USD is almost unchanged in the Thursday session. Currently, the pair is trading at 1.1276, up 0.02% on the day. On the release front, German Final CPI remained steady, with a gain of 0.4%. This matched the forecast. The U.S. will release producer price index reports. PPI is expected to rise to 0.3% and Core PPI is forecast to improve to 0.2%. Unemployment claims is projected to rise to 210 thousand. On Friday, the eurozone releases industrial production, while the U.S. posts UoM consumer sentiment and the semi-annual Treasury currency report.

There were no surprises from the ECB policy meeting, and the euro responded with limited movement. The bank held the minimum bid rate at 0.00%, where it has been pegged since 2016. Investors were more interested in Mario Draghi’s comments after the rate decision. Draghi acknowledged that eurozone economic data remains weak, particularly in the manufacturing sector. The economic outlook remains weak, with Draghi saying that “slower growth momentum is expected to extend into the current year”. At the same time, Draghi said that the likelihood of a recession remains low. On the inflation front, Draghi stated that interest rates will remain at current levels at least until the end of 2019 and possibly later.

The Federal Reserve was also in focus on Wednesday, with the release of the minutes from the March meeting. The Fed left the door open to rate hikes in 2019, provided that economic conditions improved. Some members said that they expected the economy to improve, while others said that rate movement could shift “in either direction based on incoming data and other developments”.

EUR/USD Fundamentals

Thursday (April 11)

• 2:00 German Final CPI. Estimate 0.4%. Actual 0.4%

• 2:45 French Final CPI. Estimate 0.8%. Actual 0.8%

• 8:30 U.S. PPI. Estimate 0.3%

• 8:30 US Core PPI. Estimate 0.2%

• 8:30 US Unemployment Claims. Estimate 210K

• 9:30 US FOMC Member Clarida Speaks

• 9:35 US FOMC Member Williams Speaks

• 9:40 US FOMC Member Bullard Speaks

• 10:30 US Natural Gas Storage. Estimate 32B

• 13:01 US 30-year Bond Auction.

• 16:00 US FOMC Member Bowman Speaks

Friday (April 12)

• 5:00 Eurozone Industrial Production. Estimate -0.5%

• 10:00 US UoM Consumer Sentiment. Estimate 98.1

• Tentative – US Treasury Currency Report

Open: 1.1274 High: 1.1288 Low: 1.1273 Close: 1.1276

EUR/USD Technical

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

• 1.1212 is providing support

• 1.1300 remains a weak resistance line

• Current range: 1.1212 to 1.1300

Further levels in both directions:

• Below: 1.1212, 1.1120, 1.1046 and 1.0951

• Above: 1.1300, 1.1434 and 1.1553