EUR/USDÂ continues sliding, following the gap lower in the wake of the new week. The comments from Draghi tying the exchange rate to monetary policy still echo and markets are still digesting the US retail sales number. Was it good enough? There is no rest for markets, as the German ZEW figure is coming soon, as well as a speech from Fed Chair Janet Yellen.
Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.
Update: German ZEW falls to 43.2 points – EUR/USD pressured under 1.38
EUR/USD Technical
- EUR/USD remained depressed under 1.3830 before taking another dip lower.
Current range: 1.3740 to 1.38
Further levels in both directions:
- Below: 1.3740, 1.37, 1.3650 and 1.3580.
- Above: 1.38, 1.3830, 1.3895, 1.3964 and 1.40.
- 1.3740 is a weak line before 1.3650.
- 1.3830 proved its strength once again.
EUR/USD Fundamentals
- 9:00Â German ZEW Economic Sentiment. Exp. 46.3 points. All-European exp. 60.7. See how to trade the ZEW number with EUR/USD.
- 9:00 Euro-zone trade balance. Exp. +14 billion.
- 12:30 US CPI. Exp. +0.1%, core exp. +0.1%.
- 12:45 Fed Chair Janet Yellen talks.Â
- 13:00 USÂ TIC Long-Term Purchases. Exp. +31 billion.
- 14:00 USÂ NAHB Housing Market Index. Exp. 50 points.
- 19:00 US FOMC member Charles Plosser talks. He is a hawk.
*All times are GMT
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- Draghi drag: The head of the ECB made significant anti-euro comments over the weekend, saying that the strength of the euro may trigger more monetary stimulus. This comment was enough to send the euro lower in a Sunday gap. The strong euro weighs on exports and lowers inflation. .
- Is the US enjoying a spring bounce?: Recent job figures have been OK and retail sales exceeded expectations. However, markets are not 100% convinced that the US is bouncing back after the harsh winter. We will hear more about it from Fed Chair Yellen.
- More weak EZ inflation numbers: France reported modest price rises for March and so did quite a few other European countries, including Spain, which is in deflation. This will probably lead to a downgrade in the final CPI numbers due next week. It is still to be seen if the ECB will act. The April numbers seem more important to Draghi and company. Tomorrow’s final inflation numbers for March become even more important
- Ukraine crisis worsens: Tensions between the US and Russia continue to heat up over the Ukraine. Ukraine’s outstanding gas bill triggered a threat by Russia to cut off supplies. Europe relies on Russian gas.
More:Â Any version of euro-zone QE is going have a limited effect
