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EUR/USD Aug. 18 – Clings to 1.34 as Fed focused

EUR/USD  starts another week in August with slow trading around the 1.34 level. We have seen the pair slide for several weeks, but we haven’t seen a major break in quite some time. Is this the calm before the storm? A slight disappointment in trade balance hasn’t helped the euro that still suffers from the weak  GDP numbers last week.

 Here is a quick update on what’s moving the pair.

  • EUR/USD  was  uneventful  in the  Asian session. The pair has  posted gains in the  European session.
  • Current range: 1.3333 to 1.3415.

Further levels in both directions:

EURUSD August 18 2014 technical analysis fundamental outlook and sentiment

  • Below: 1.3333,  1.3295 and 1.32.
  • Above: 1.3415,  1.3450 and 1.35
  • The latest 9 month low of 1.3333 (or 0.75 on USD/EUR) is strong support.
  • 1.3450 is the strong resistance  line.

EUR/USD Fundamentals

  • 9:00 Euro-zone  Trade Balance. Exp. 14.9 billion. Actual 13.8 billion.
  • 10:00 German Bundesbank monthly report.
  • 14:00 US  NAHB Housing Market Index. Exp. 53 points.

*All times are GMT.

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

EUR/USD Sentiment

  • No growth in the euro-zone: The euro-zone output remained unchanged in Q2. French preliminary GDP remained flat at 0.0%, unchanged from a month earlier. German preliminary GDP  slipped to -0.2%, the first contraction in the German economy since Q4 of 2012. This is certainly worrying. Also other numbers, such as German business confidence, remain pressured.
  • German, French  inflation remains sluggish:  The ECB has tried to stave off deflation concerns with interest rate cuts, but inflation levels have not risen. Eurozone  Final CPI dipped to 0.4%, down from 0.5% a month earlier. Eurozone  Final  Core CPI, a minor  event, remained unchanged at 0.8%. Draghi did not seem worried about this, but  did go to explain why EUR/USD should slide.
  • US jobs data is OK:  The Fed favorite JOLTS figure continued advancing, even if this time it didn’t stand out. Weekly jobless claims bounced back up above 300K, but the 4 week moving average remains low and this could certainly encourage the Fed.
  • Fed focus: This week’s FOMC meeting minutes  will supply new  information about the internal thinking at the central bank. They usually tend to move markets despite the  publication at a time of low volatility. Yet this is only the first course: Janet Yellen will give a speech in Jackson Hole on Friday at a gathering of central bankers. The speech is closely watched. Will she take a step forward and acknowledge the recovery or remain extra cautious?
  • 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. Things are a bit quieter in Gaza, as a ceasefire between Hamas and Israel has been extended for another five days.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.