EUR/USD – Euro yawns as risk appetite improves

Kenny Fisher MarketPulse

EUR/USD has ticked higher in the Wednesday session. Currently, the pair is trading at 1.1320, down 0.06% on the day. On Thursday, eurozone industrial production declined 0.9%, below the estimate of -0.4%. In the U.S., the markets are expecting soft numbers from consumer inflation. CPI and Core CPI are forecast to post gains of 0.1% and 0.2%, respectively. On Thursday, the eurozone and Germany release GDP, and the U.S. publishes retail sales and PPI.

Risk appetite has improved on Wednesday, although the euro hasn’t taken advantage against the U.S. dollar. There was positive news on two fronts which cheered investors. In the U.S., lawmakers have tentatively agreed on a proposal which will avert another government shutdown, which would take effect on Friday. However, the deal needs to be approved by Congress and President Trump. The agreement does not provide Trump will funding for a border wall, and the deadlock between Congress and Trump over this issue triggered a government shutdown in January which lasted 35 days. Both sides are eager to avoid blame for a second shutdown, and Trump hinted earlier in the week that he would go along with the deal, albeit with reservations.

On the trade front, U.S. and Chinese officials are meeting for a third round of talks in Beijing. Investors have been frustrated by the lack of progress, but were relieved when Trump said that he could postpone a March 1 deadline for new tariffs on Chinese imports if the trade talks made sufficient progress. The U.S-China trade spat has rocked global equity markets and hurt global growth. If the tariffs are suspended, EUR/USD is likely to move higher.

Risk appetite very much improved

Kiwi surges on less-dovish RBNZ

EUR/USD Fundamentals

5:00 Eurozone Industrial Production. Estimate- 0.4%. Actual -0.9%
Tentative – German 30-year Bond Auction
8:30 US CPI. Estimate 0.1%
8:30 US Core CPI. Estimate 0.2%
10:30 US Crude Oil Inventories. Estimate 2.1M
14:00 US Federal Budget Balance. Estimate -10.5B
2:00 German Preliminary GDP. Estimate 0.1%
5:00 Eurozone Flash GDP. Estimate 0.2%
5:00 Eurozone Flash Employment Change. Estimate 0.2%
8:30 US Core Retail Sales. Estimate 0.0%
8:30 US Retail Sales. Estimate 0.1%
8:30 US PPI. Estimate 0.1%
8:30 US Core PPI. Estimate 0.2%
8:30 US Unemployment Claims. Estimate 225K

Open: 1.1326 High: 1.1342 Low: 1.1313 Close: 1.1320

EUR/USD Technical

S1	S2	S1	R1	R2	R3
1.1046	1.1120	1.1212	1.1300	1.1434	1.1553

EUR/USD was mostly flat in the Asian session. The pair posted small gains in European trade but has recovered

1.1212 is providing support
1.1300 is a weak line
Current range: 1.1212 to 1.1300

Further levels in both directions:

Below: 1.1212, 1.1120 and 1.1046
Above: 1.1300, 1.1434, 1.1553 and 1.1685

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

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