EUR/USD continues to point downwards on Wednesday, as the pair trades in the mid-1.33 range. In economic news, German and French inflation levels remained low in July. Eurozone manufacturing numbers are also sputtering, as Industrial Production posted a second straight decline. In the US, today’s major events are Core Retail Sales and Retail Sales. The markets are keeping a close eye on Eurozone GDP and inflation data, which will be released on Thursday.
 Here is a quick update on what’s moving the pair.
- EUR/USD was almost unchanged in the Asian session. The pair has edged lower in the European session.
- Current range:Â 1.3325 to 1.3365.
Further levels in both directions:
- Below: 1.3325, 1.3295 and 1.32.
- Above: 1.3365, 1.34, 1.3450, 1.35, 1.3550, 1.3585 and 1.3610.
- 1.3325 remains an immediate support level. 1.3295 follows.
- On the upside, 1.3365 is a weak line. The round number of 1.34 is next.
EUR/USD Fundamentals
- 6:00 German Final CPI. Estimate 0.3%, actual 0.3%.
- 6:00 German Final WPI. Estimate 0.3%, actual 0.1%.
- 6:45Â French CPI. Estimate -0.2%, actual -0.3%.
- 9:00 Eurozone Industrial Production. Estimate +0.5%, actual -0.3%.
- Tentative – German 10-year Bond Auction.
- 12:30 US Core Retail Sales. Estimate 0.4%.
- 12:30 US Retail Sales. Estimate 0.2%.
- 13:05 FOMC Member William Dudley Speaks.
- 14:00 US Business Inventories. Estimate 0.4%.
- 14:30 US Crude Oil Inventories. Estimate -0.8M.
- 17:01 US 10-year Bond Auction.
*All times are GMT.
For more events and lines, see the EUR/USDEUR/USDEUR/USDEUR/USDEUR/USD.
EUR/USD Sentiment
- German, French inflation remains sluggish: The ECB has tried to stave off deflation concerns with interest rate cuts, but inflation levels have not risen. On Wednesday, German inflation numbers remained weak, while French CPI posted its first decline since January. Manufacturing numbers also disappointed as Eurozone Industrial Production slipped to -0.3%, its third decline in four readings. This disappointed the markets, which had expected a gain of +0.5%. The euro remains under strong pressure, and if Eurozone GDP and CPI readings miss expectations, we could see the currency slide further.
- Confidence indicators plunge: German ZEW Economic Sentiment tumbled in July, falling to just 8.6 points, down from 27.1 points a month earlier, and its lowest level since November 2012. The estimate stood at 18.2 points. Germany, the largest economy in the Eurozone, continues to sputter. Last week, the country’s trade surplus narrowed and manufacturing numbers missed expectations. With economic indicators pointing downward and confidence in the German economy ebbing, we could see a decline in German GDP on Thursday, which would likely have a chilling effect on the shaky euro. Eurozone ZEW Economic Sentiment followed a similar path to the German release, slipping to 23.7 points, compared to 48.1 points in the previous release. The markets had expected a reading of 41.3 points.
- US jobs data continues to shine:Â US unemployment indicators are under close scrutiny, as the strength of the labor market is one of the most important factors influencing the Federal Reserve regarding the timing of an interest rate hike. A rate hike is expected by mid-2015, but stronger economic data, especially on the employment front, could hasten a rate move. There was positive news on Tuesday, as JOLTS Job Openings continued to improve in July, although the indicator missed the estimate. The US releases additional job data on Thursday, with the release of Unemployment Claims.
- Geopolitics stable for now: Hotspots in Ukraine and the Middle East remain tense and could have dramatic effects on the markets. The US has accused Russia of massing troops on its border with Ukraine, and tensions are high as the EU has slapped stronger sanctions on Russia, while Moscow has retaliated by banning many food imports from the West.  The euro-zone could see food prices going down due to excessive supply. In addition, US president Obama has ordered airstrikes in a remote area of Iraq to prevent ISIL extremists from murdering Yazdi civilians, yet this hasn’t disrupted oil production so far. In Gaza, a 72-hour ceasefire has been holding, but it is set to expire late on Wednesday night, with both Israel and Hamas saying they’re prepared for further fighting if current negotiations reach a dead end.
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