EUR/USD is showing little activity in Wednesday trading, as the pair continues to trades in the mid-1.35 range. The euro has had a quiet week so far, and this could continue on Wednesday, with no releases scheduled in the Eurozone or the US. Meanwhile, the World Economic Forum kicks off in Davos, Switzerland. Thursday will be very busy, with a host of PMI releases out of Europe. As well, the US will release the all-important Unemployment Claims.
Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.
EUR/USD Technical
- EUR/USD touched a high of 1.3580 in the Asian session and then moved lower, consolidating at 1.3541. The pair is unchanged in the European session.
Current range: 1.3450 to 1.3550.
Further levels in both directions:Â 
- Below: 1.3450, 1.34, 1.3320, 1.3240 and 1.3175.
- Above: 1.3550, 1.3615, 1.3675, 1.3710, 1.3800, 1.3832, 1.3940 and 1.4036.
- 1.3450 is providing strong support.
- 1.3550 is a weak resistance line. 1.3615 is stronger.
EUR/USD Fundamentals
- There are no releases out of the Eurozone or US on Wednesday.
*All times are GMT
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- Davos hosts world leaders: The World Economic Forum kicks off Wednesday in Davos, Switzerland. The prestigious event will see senior political officials, head of foreign banks and business people from dozens of countries meet and mingle. The currency markets can be affected by statements issued at the forum, particularly by central bankers or other senior officials.
- German Consumer Sentiment misses mark: German ZEW Consumer Sentiment didn’t show much change in December, coming in at 61.7 points, compared to 62.0 points a month earlier. However, the key indicator fell well short of the estimate of 63.4 points. The all-European release surprised with a sharp rise, climbing to 73.3 points, up from 68.3 a month earlier. This easily beat the estimate of 70.2 points. The euro responded with a slight drop against the dollar.
- Deflation Concerns Continue in Europe: Eurozone indicators continue to point to weak inflation, and this was underscored on Monday, as German PPI posted another weak reading, posting a gain of just 0.1%. While the ECB seems concerned with low inflation and not outright deflation, any further deterioration could push the ECB to set a negative deposit rate as soon as March 2014. This is a primary source of euro vulnerability.
- German strength: German growth seems solid as we start 2014. PMIs are upbeat and business sentiment is strong in the bloc’s largest economy. The ZEW Economic Sentiment did fall short of the estimate, but posted another strong reading.
- French recession?: We’ll get a look at French PMI numbers on Thursday, and these key readings could show once again that the economic situation in France is worsening. While the German economy seems solid and Spain has surprised the markets with some strong numbers, it will be hard for the Eurozone to enjoy stability while Italy is struggling and core France is squeezing.
- US consumer still buying: US retail sales numbers painted a mixed picture. Retail sales rose by only 0.2%, meeting forecasts. The up side came from core sales, which jumped by 0.7%, compared to 0.4% the month before. This easily beat the estimate of 0.4%. Also consumer confidence remains on high ground. December is a key month in US shopping, so January’s consumer spending numbers could taper off.
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