EUR/USD: Euro Edges Lower As Eurozone CPI Matches Forecast

The euro is showing little movement in the Thursday session. Currently, EUR/USD is trading at 1.1770, down 0.18% on the day. In the eurozone, Final CPI gained 1.4% and Core Final CPI gained 0.9%, as both readings matched the forecasts. In the US, there are two key events. Unemployment claims is expected to drop to 235 thousand, and the Philly Fed Market Index is expected to drop to 24.5 points. On Friday, ECB President Mario Draghi and German Buba President Jens Weidmann speaks at Frankfurt European Banking Congress. The US will release Building Permits and Housing Starts.

There were no surprises from key consumer spending and inflation data on Wednesday. CPI and Core CPI matched the forecasts, with gains of 0.1% and 0.2%, respectively. Consumer spending reports were a mix – retail sales gained 0.1%, shy of the estimate of 0.2%. Core Retail Sales came in at 0.2%, beating the forecast of 0.0%. The Federal Reserve would certainly like to see higher inflation numbers, which remain well below the Fed inflation target of 2.0%. Still, the markets are very bullish on additional rate hikes, as the odds of upcoming rate hikes continues to move higher. Currently, the likelihood of a rate hike in December stands at 96%, and a January raise is priced in at 94%.

Central banks do their best to avoid causing market volatility, which requires clear communication with the public and the markets. However, with bank policymakers making public statements on a daily basis, differences in opinion on future monetary policy or quantitative easing are bound to come up, and this can lead to market movement. Early in the week, Fed Chair Janet Yellen and ECB Mario Draghi participated at an ECB event which focused on communication with the markets. Yellen acknowledged that the FOMC committee of 19 members posed problems, as members did not always speak with a unified voice. Yellen admitted that this problem would not be solved anytime soon, saying it was “a work in progress”. To be fair, this is also an issue for the ECB, as the markets have on occasion reacted to comments from inpidual policymakers.

EUR/USD Fundamentals

Thursday (November 16)

  • 5:00 Eurozone Final CPI. Estimate 1.4%. Actual 1.4%
  • 5:00 Eurozone Final Core CPI. Estimate 0.9%. Actual 0.9%
  • Tentative – Spanish 10-year Bond Auction
  • 8:30 US Unemployment Claims. Estimate 235K
  • 8:30 US Import Prices. Estimate 0.4%
  • 8:30 US Philly Fed Manufacturing Index. Actual 24.5
  • 9:15 US Capacity Utilization Rate. Estimate 76.3%
  • 9:15 US Industrial Production. Estimate 0.5%
  • 10:00 US NAHB Housing Market Index. Estimate 67
  • 10:30 US Natural Gas Storage. Estimate -15B
  • Tentative – US FOMC Member Robert Kaplan Speaks
  • 3:45 US FOMC Member Lael Brainard Speaks

Friday (November 17)

  • 3:30 ECB President Mario Draghi Speaks
  • 8:00 German Buba President Weidmann Speaks
  • 8:30 US Building Permits. Estimate 1.25M
  • 8:30 US Housing Starts. Estimate 1.19M

*All release times are GMT

*Key events are in bold

EUR/USD for Thursday, November 16, 2017


EUR/USD for November 16 at 5:55 EDT

Open: 1.1791 High: 1.1801 Low: 1.1768 Close: 1.1770

EUR/USD Technical


EUR/USD was flat in the Asian session and is showing limited movement in European trade

  • 1.1657 is providing support
  • 1.1777 has switched to resistance and is a weak line

Further levels in both directions:

  • Below: 1.1657, 1.1574 and 1.1489
  • Above: 1.1777, 1.1876, 1.1936 and 1.2033
  • Current range: 1.1657 to 1.1777

OANDA’s Open Positions Ratio

EUR/USD has shown little movement this week. Currently, short positions have a majority (65%), indicative of EUR/USD continuing to move downwards.

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