Euro Steady, U.S. Durable Goods Reports Next

EUR/USD has moved higher in the Friday session, erasing most of the gains seen on Thursday. Currently, the pair is trading at 1.2325, up 0.18% on the day. In economic news, there are no eurozone events on the schedule. In the US, durable goods reports are expected to rebound after posting declines in January. Core Durable Goods Orders is expected to rise 0.5%, and durable goods orders is forecast to climb 1.6%. On the housing front, New Home Sales is expected to improve to 621 thousand.

As widely expected, the Fed raised rates by a quarter-point on Wednesday, marking the first rate hike in 2018. The markets were looking for any clues with regard to the pace of rate hikes in 2018 – currently the Fed is projecting three hikes, but a robust US economy could push the Fed to press the rate trigger four times. The rate statement did not directly address the issue, but there was a refreshing lack of Fedspeak from policymakers, who said that “the economic outlook has strengthened in recent months”. This phrase has not been used in previous rate statements, and underscores a more hawkish stance from the Fed. The markets are expecting the Fed not to skip a beat, with the CME Group pricing another rate hike in May at 96%. This could translate into gains for the US dollar, at the expense of the euro and other major currencies.

The business sector continues to have strong confidence in the German economy, but there is concern about possible headwinds due to recent tariffs imposed by the Trump administration. The German Ifo Business Climate report dipped to 114.7 in March, which matched the forecast. However, this marked a second straight drop, and was the lowest reading in 11 months. The report attributed lower business morale to concerns that tariffs could hurt transatlantic trade, as well as the negative impact of a stronger euro. On the bright side, tax reform in the US and the economic rebound in the eurozone have increased the demand for German goods and services.

China is not backing down, and why should they ?

EUR/USD Fundamentals

Friday (March 23)

  • 8:10 US FOMC Raphael Bostic Speaks
  • 8:30 US Core Durable Goods Orders. Estimate 0.5%
  • 8:30 US Durable Goods Orders. Estimate 1.6%
  • 10:00 US New Home Sales. Estimate 621K

*All release times are GMT

*Key events are in bold

EUR/USD for Friday, March 23, 2018

EUR/USD for March 23 at 5:55 DST

Open: 1.2301 High: 1.2349 Low: 1.2300 Close: 1.2325

EUR/USD Technical

S1S2S1R1R2R31.20921.22351.23191.24601.25811.2662

EUR/USD edged higher in the Asian session and has ticked lower in European trade

  • 1.2319 is a fluid line and is currently providing weak support.
  • 1.2460 is the next line in resistance

Further levels in both directions:

  • Below: 1.2319, 1.2235, 1.2092 and 1.2025
  • Above: 1.2460, 1.2581 and 1.2662
  • Current range: 1.2319 to 1.2460

OANDA’s Open Positions Ratio

EUR/USD ratio is almost unchanged in the Friday session. Currently, short positions have a majority (58%), indicative of EUR/USD reversing directions and moving to lower ground.

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