EUR/USD – Euro unchanged as investors look for clues

EUR/USD has started the week unchanged. In Monday’s European session, the pair is trading at 1.1424, up 0.04% on the day. On the release front, there are no major events on the schedule. The eurozone’s current surplus dropped sharply to EUR 16.9 billion, short of the forecast of EUR 24.2 billion. This marked the smallest surplus since July 2014. On Tuesday, the eurozone releases PPI and the U.S. publishes building permits and housing starts.

Inflation in the eurozone improved in October. Eurozone Final CPI edged up to 2.2% and Final Core CPI improved to 1.1%, both of which matched their estimates. In October 2017, Final CPI gained 1.7%. At the same time, lower oil prices could mean that In December, the ECB will revise downwards its inflation forecasts.

In the U.S., consumer inflation and spending numbers were strong in October. On Thursday, the U.S released retail sales reports. Retail sales rebounded with a strong gain of 0.7% in October, after a decline of -0.1% a month earlier. Core retail sales jumped 0.8%, after a gain of 0.1% in September. There was good news from the inflation front on Wednesday, as U.S consumer inflation numbers beat their estimates for October. The consumer price index posted a gain of 0.3%, its strongest gain since January. Core CPI, which excludes food and energy prices edged higher to 0.2%, marking a 3-month high. Both releases were in line with forecasts. Core CPI was 2.1% higher than a year ago. The solid consumer data means that the Fed remains on track to continue raising interest rates. The Federal Reserve holds its next policy meeting in December, with the odds of a December rate hike at 69%, slightly lower compared to last week.

EUR/USD Fundamentals

Monday (November 19)

• 4:00 Eurozone Current Account. Estimate 24.2B. Actual 16.9B

• All Day – Eurogroup Meetings

• 6:00 German Buba Monthly Report

• 10:00 US NAHB Housing Market Index.Estimate 67

• 10:45 US FOMC Member Williams Speaks

Tuesday (November 20)

• 2:00 German PPI. Estimate 0.3%

• All Day – ECOFIN Meetings

• 8:30 US Building Permits. Estimate 1.26M

• 8:30 US Housing Starts. Estimate 1.23M

• 10:00 German Buba President Weidmann Speaks

EUR/USD Technical

EUR/USD ticked lower in the Asian session but has recovered in the European session

• 1.1300 is providing support

• 1.1434 is a weak resistance line

Current range: 1.1300 to 1.1434

• Further levels in both directions:

• Below: 1.1300, 1.1212, 1.1120 and 1.0992

• Above: 1.1434, 1.1553 and 1.1685