EUR/USD is ticking higher in the wake of the new week, but it is only able to recover some of the losses seen late last week. The echoes of the FOMC meeting and the disappointing ECB TLTRO still weigh on the pair. The head of the ECB will testify later on and might provide some volatility. In the US, we also have some interesting data.
Here’s a quick update on technicals, fundamentals and sentiment moving the pair.
- Asian session: The pair traded steadily under 1.2920..
- Current range:Â 1.2820
Further levels in both directions:
- Below: 1.2860, 1.2835, 1.28 and 1.2750.
- Above: 1.2920, 1.2960, 1.30 and 1.3050
- We are now one range lower, and there is room for more falls.
EUR/USD Fundamentals
- 13:00 Mario Draghi talks.
- 14:00 USÂ Existing Home Sales. Exp. 5.21 million.
- 14:00Â Euro-zone Consumer confidence. Exp. -11 points.
- 14:05 US FOMC member Bill Dudley talks.
* All times are GMT.
For more events and lines, see the EUR/USD.
EUR/USD Sentiment
- Weak TLTRO results:The first round of targeted cheap loans which are expected to reach the real economy had a poor outcome of only 82.6 billion euros. Banks are not so eager to lend, even cheap money. This raises the chances of further monetary stimulus from the ECB, and weighs on the euro. In his testimony, Draghi will likely discuss this. If he hints at more action, the euro could suffer.
- Mixed US data: Jobless claims dropped sharply to 280K, around the multi-year lows. However, the volatile housing starts and building permits disappointed. Today’s existing home sales put the focus on housing once again, after the disappointing data last week.
- Fed related dollar rally: The Fed did not remove the critical word “considerable†regarding the timing of the first rate hike and still said there is under utilization in the labor market. The moves to the hawkish side were very subtle: two hawkish dissenters, more members seeing a hike in 2015 and an explicit declaration that QE ends in October. Nothing was big news, but the markets seem hungry for dollars and EUR/USD fell to a new 14 month low at 1.2834 but lost a lot of ground in the late hours of the week.
In our latest episode, we talk about the risk/reward ratio, the FOMC decision and what it means for the dollar and Chinese wobbles:
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