EUR/USD – Euro posts small gains, U.S consumer inflation ahead

By Kenny Fisher, Currency Analyst at Market Pulse

EUR/USD has posted slight gains in the Friday session. Currently, the pair is trading at 1.1524, up 0.21% on the day. On the release front, there are no major eurozone indicators. Italian industrial production declined by 1.6%, well short of the estimate of -0.3%. Investors are bracing for weak inflation numbers out of the United States. CPI is expected to drop to -0.1%, while Core CPI is forecast to remain steady at 0.1%

Manufacturing sectors across the eurozone continue to struggle. Industrial production in Italy fell by 1.6% in November and in France the drop was 1.3%. The biggest worry is over Germany, where industrial production has slipped for three straight month. With the three largest economies in the eurozone in trouble, conditions may not warrant any rate increases in the foreseeable future. The ECB winded up its stimulus program last month, and had expressed plans to raise rates later this year.

Investor optimism is higher this week, as hopes are high that trade tensions between the U.S. and China could ease. The world’s two largest economies have been engaged in a nasty tariff spat, which has rocked the markets in recent weeks and threatens to put a chill on global growth. Chinese and U.S. officials met in China this week and the talks reportedly produced “minor progress”, raising hopes that the sides will reach an agreement and ease global trade tensions. The stakes are high, as President Trump has threatened to impose higher tariffs on $250 billion worth of Chinese products if there is no deal by March 1.

EUR/USD Fundamentals

Friday (January 11)

  • 4:00 Italian Industrial Production. Actual -1.6%
  • 00:00 US FOMC Member Clarida Speaks
  • 8:30 US CPI. Estimate -0.1%
  • 8:30 US Core CPI. Estimate 0.2%
  • 14:00 US Federal Budget. Estimate -8.08B

*All release times are EST

*Key events are in bold

EUR/USD for Friday, January 11, 2019

EUR/USD for January 11 at 6:15 EST

Open: 1.1500 High: 1.1533 Low: 1.1497 Close: 1.1522

EUR/USD Technical

S1S2S1R1R2R3
1.12121.13001.14341.15531.16851.1803

EUR/USD posted small gains in the Asian session and is showing limited movement in European trade

  • 1.1434 is providing support
  • 1.1553 is the next resistance line
  • Current range: 1.1434 to 1.1533

Further levels in both directions:

  • Below: 1.1434, 1.1300, 1.1212 and 1.1120
  • Above: 1.1553, 1.1685 and 1.1803

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