EUR/USD April 29 – Slight Gains After Strong German

EUR/USD is firm in Tuesday trading, as the pair trades in the high-1.38 range. On the release front, German Consumer Climate continues to shine and matched expectations. German Preliminary CPI will be released later in the day. In the US, today’s highlight is CB Consumer Confidence. The markets are calling for a rise from the indicator in the March release.

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

• EUR/USD edged upwards in the Asian session, closing at 1.3870. The pair is unchanged in European trading.

Current range: 1.3830 to 1.3894.

Further levels in both directions: 

• Below: 1.3865, 1.3830, 1.3785, 1.3740, 1.37, 1.3650 and 1.3560, 1.3515 and 1.3450
• Above: 1.3905, 1.3964, 1.40, 1.4055 and 1.4105
• On the upside, 1.3905 is the next line of resistance.
•  On the downside, 1.3865 is fluid. 1.3830 is next.

EUR/USD Fundamentals

• 6:00 GfK German Consumer Climate. Exp. 8.5 points. Actual 8.5 points.
• All Day –  German Preliminary CPI. Exp. -0.1%.
• 7:00 Spanish Employment Rate. Exp. 25.6%. Actual 25.9%.
• 8:00 Eurozone M3 Money Supply. Exp. 1.4%. Actual 1.1%.
• 8:00 Eurozone Private Loans. Exp. -2.0%. Actual -2.2%.
• 8:00 Eurozone Italian Retail Sales. Exp. 0.4%. Actual -0.2%.
• Tentative – Italian 10-year Bond Auction.
• 13:00 US S&P/CS Composite-20 HPI. Estimate 12.9%.
• 14:00 US CB Consumer Confidence. Exp. 82.9 points.

*All times are GMT

For more events and lines, see the Euro to dollar forecast.

EUR/USD Sentiment

• US housing numbers rebound: US housing numbers were weak last week, but it was a different story on Monday, as Pending Home Sales soared in March. The key indicator jumped 3.4%, crushing the estimate of 1.0%. This marked its biggest monthly gain since last May. The indicator has posted mostly declines in recent readings, so the strong gain was welcome news. Meanwhile, US consumers appear to be content, as the UoM Consumer Sentiment jumped to 84.1 points in March, beating the estimate of 83.2. It marked the indicator’s highest level since June. Strong consumer optimism should translate into higher consumer spending, which is critical for US economic growth.
• German consumer confidence remains high: With the Eurozone struggling, Germany will have to take the lead as the region’s number one economy. There was good news on Tuesday, as German Consumer Confidence matched the forecast with a strong reading of 8.5 points. The indicator has registered this figure for three consecutive months, pointing to strong optimism from German consumers.
• Draghi remarks weigh on euro: For the second time, Draghi tied between the value of the euro and future monetary policy. This mention comes as the euro remains firm not only against the dollar but also against the Chinese yuan which is depreciating. EUR/CNY is at the highest since 2011.
• Tension growing towards fresh inflation data: With the euro-zone recovery still struggling and a strong exchange rate, there is a danger of deflation. Recent ECB speakers have hyped up expectations for the April 30th release of the flash euro-zone CPI estimate for April. After headline CPI dropped to 0.5% and core inflation to 0.7%, both are expected to rise. One of the reasons for a rise is the shift in the dates of the Easter holiday from last year to this one. We could see some movement from EUR/USD after the release of German Preliminary CPI later on Tuesday.

More: Inflation below 0.5% could force the ECB to act

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