EUR/USD – Euro hits 1-week high, US consumer inflation next

EUR/USD has edged higher in the Thursday session. Currently, the pair is trading at 1.1546, up 0.23% on the day. On the release front, French Final CPI declined 0.2%, matching the forecast. The ECB will release the accounts of the August policy meeting. In the U.S, the key indicators are CPI reports. We’ll also get a look at unemployment claims and the Treasury currency report. On Friday, Germany releases Final CPI and the eurozone publishes Industrial Production. The U.S releases UoM Consumer Sentiment.

With bonds yields continuing to rise, investors have reacted negatively and stock markets continue to spin lower. The U.S dollar often is the winner in times of crisis, providing a safe haven for nervous investors. However, the euro has weathered this latest crisis, holding its own against the greenback this week. On Thursday, German 10-year bonds fetched 0.55%, marking a 6-month high. The markets will be keeping a close eye on U.S consumer inflation data – strong numbers would likely increase the likelihood of a December rate hike in the U.S and reinvigorate the dollar.

Investors will be keeping a close eye on the ECB policy meeting accounts, looking for hints as to the timing of a rate hike next year. The ECB has stated that it will not raise rates before the “end of the summer”, which many analysts have interpreted as September 2019. However, that time period is not etched in stone, and the ECB could opt to raise rates earlier, if warranted by economic conditions. Besides inflation, ECB policymakers will have to weigh other factors such as the U.S-China trade war when deciding when to raise interest rates.

 

EUR/USD Fundamentals

Thursday (October 11)

• 2:45 French Final CPI. Estimate -0.2%. Actual -0.2%

• 7:30 ECB Monetary Policy Meeting Accounts

• 8:30 US CPI. Estimate 0.2%

• 8:30 US Core CPI. Estimate 0.2%

• 8:30 US Unemployment Claims. Estimate 207K

• 10:30 US Natural Gas Storage. Estimate 87B

• 11:00 US Crude Oil Inventories. Estimate 2.3M

• 13:01 US 30-year Bond Auction

• Tentative – US Treasury Currency Report

Friday (October 12)

• 2:00 German Final CPI. Estimate 0.4%

• 5:00 Eurozone Industrial Production. Estimate 0.4%

• 8:30 US Import Prices. Estimate 0.3%

• 10:00 US Preliminary UoM Consumer Sentiment. Estimate 100.4

• 10:00 US Preliminary UoM Inflation Expectations

• 12:30 US FOMC Member Raphael Bostic Speaks

• 12th-18th US Federal Budget Balance. Estimate 71.0B

• 10:30 US FOMC Member Randal Quarles Speaks

 

EUR/USD Technical

S1	S2	S1	R1	R2	R3
1.1190	1.1300	1.1434	1.1553	1.1637	1.1718

• 1.1434 is providing support

• 1.1553 was tested earlier in resistance and could break in the Thursday session

Further levels in both directions:

• Below: 1.1434, 1.1300 and 1.1190

• Above: 1.1553, 1.1637, 1.1718 and 1.1840

• Current range: 1.1434 to 1.1553