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Euro Dips, Markets Eye US Consumer Confidence

Euro Dips, Markets Eye US Consumer Confidence

EUR/USD has posted losses on Tuesday, after the starting the week with limited movement. Early in the North American session, the pair is trading at 1.0920. Taking a look at economic news, there are no European releases on Tuesday. In the US, Goods Trade deficit widened to $60.9 billion, slightly better than the estimate of a $60.5 billion deficit. Later in the day, we’ll get a look at CB Consumer Confidence, with the markets expecting a strong reading of 93.9 points.

Consumer confidence indicators are closely monitored by analysts, as stronger consumer confidence often translates into increased consumer spending, a key driver of economic growth. The news has been positive on this front, as UoM Consumer Sentiment improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high. The markets are counting on another solid reading from CB Consumer Confidence, which is expected to improve to 93.9 points. Strong consumer demand has been an important factor in the strength of the US economy, which led to the historic rate hike by the Federal Reserve last week.

The last two months of 2015 has seen some significant volatility from EUR/USD. The euro plunged close to 500 points in November, in the aftermath of the ECB policy meeting shocker where the ECB held off from implementing further easing moves, despite hints from ECB head Mario Draghi that he was prepared to take drastic action to kick-start the moribund Eurozone economy. However, the euro has shown resilience, recovering all of these losses in the month of December, even with the Fed rate hike which has bolstered the US dollar against most major currencies.

EUR/USD Fundamentals

Monday (Dec. 29)

  • 13:30 US Goods Trade Balance. Estimate -60.9B. Actual -60.5B.
  • 14:00 US S&P/CS Composite-20 HPI. Estimate 5.6%. Actual 5.5%
  • 15:00 US CB Consumer Confidence. Estimate 93.9 points

EUR/USD for Tuesday, December 29, 2015

EUR/USD

EUR/USD December 29 at 14:10 GMT

  • EUR/USD 1.0922 H: 1.0991 L: 1.0908

EUR/USD Technicals

S1S2S1R1R2R31.06591.07321.08471.09411.10871.1172
  • The pair was uneventful in the Asian session and has posted considerable losses in European trade.
  • 1.0941 has switched to a resistance role following the pair’s losses. It is a weak line and could see further action in the North American session.
  • 1.0847 is providing support
  • Current range: 1.0847 to 1.0941

Further levels in both directions:

  • Below: 1.0847, 1.0732 and 1.0659
  • Above: 1.0941, 1.1087, 1.1172 and 1.1278

OANDA’s Open Positions Ratio

In the EUR/USD ratio, short positions command a strong majority (63%). This is indicative of trader bias towards the euro continuing to move downwards.

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