Euro Rates Today: EUR Outlook Dominated by USD Strength, Euro Sterling Declines Halted for Now, EZ Inflation on Target
- Written by: Gary Howes
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Euro rates are today being dictated to by the strength of the US dollar, and this scenario is likely to occur for some time yet. On the data front all eyes are focused on Eurozone inflation figures which came in as expected thus offering the EUR little support.
Euro exchange rates today
- The euro dollar exchange rate (EUR/USD) is seeing some relief coming in 0.1 pct higher at 1.3619.
- The euro to pound sterling is 0.24 (EUR/GBP) pct higher at 0.8333.
- The euro Aus dollar rate (EUR/AUD) is 1.6 pct higher is 1.5503.
- The euro NZ dollar exchange rate (EUR/NZD) is 0.43 pct up at 1.6396.
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Euro exchange rate action over the past 24 hours
As mentioned, the strength of the US dollar is currently the key driver on global forex markets, as such an eye should be kept on US data releases.
"The decline of the likes of EUR/USD and cable was remarkable as it coincided with an outspoken risk-on sentiment. Are markets finally preparing for a cyclical rebound of the dollar?" says a note from Piet Lammens at KBC Markets.
Inflation data out of the Eurozone came in bang on target so the only major Eurozone release has proven to be a damp squib.
Consumer Price Index (MoM) (Dec) came in at expectations at 0.3%. Consumer Price Index (YoY) (Dec) came in at 0.8%, also where markets had been expecting it.
Outlook for euro rates today
"The euro (EUR) dropped to 1.3578 overnight finding support against the dollar. As the single currency has been gaining strength in the long run, a potential test of its resistance at 1.3699 may see the euro run for higher highs. Look ahead to day for Eurozone Core Consumer Prices monthly increase for near term direction." Orestis Aristides at EasyForex.
"EUR-USD continues to struggle at around 1.36, confirming that its upside potential may be limited in the near term. Higher US CPI is likely to favor stabilization below the 1.36 level." - UniCredit.
Commenting on the EUR/USD outlook are ICN Financial:
"The pair failed to confirm stability below 1.3590 during the downside attempts yesterday, as it remained stable above the minor support 1.3560 levels. Therefore, trading remained within the ascending channel showing on graph, and the bullish possibility remains valid if the pair didn’t break 1.3520 levels.
"Stochastic and Linear Regression Indicators are negative and MACD is trading below line 50 which is negative, so we will reverse to negativity if the pair broke 1.3520 directly. As long as the pair stabilised within the ascending channel, we are forced to remain neutral based on the technical analysis rules."
Ipek Ozkardeskaya at Swissquote Research says: "EURUSD remained well supported above the uptrend channel bottom, EURAUD demand clearly helped. The MACD is marginally bearish below 1.3755, while the markets continue seeing buying interest at 1.3550/80 zone. We keep our key support unchanged at 1.3524 (fibo 61.8% on Nov-Dec rally)."
"Eurozone data out today looks unlikely to trigger much market reaction. Though we do see downside risks on a firmer USD tone. 2year forward points suggests a sustained break of 1.3550 looks difficult unless we see a further widening of yield spreads," say Lloyds Bank.
Analyst Piet Lammens at KBC Markets has a positive bias for the EUR/GBP, but this is a longer-term view:
"We have a sterling positive bias longer term as the BoE will probably tighten policy sooner than the ECB. Short-term, we favour some consolidation as quite some good news is already discounted at current levels, especially as some UK eco data were slightly less buoyant of late.
"Next support beyond EUR/GBP 0.8252/31 stands at 0.8225 (Break-up) and at 0.8161 (76 % retracement from 0.8815). We keep a sell-on-upticks approach. The 0.8405 reaction high should provide strong resistance medium term."
Euro / Australian dollar exchange rate (EUR/AUD): ICN Financial have featured price action in this pairing today saying:
"The EURAUD approached the 38.2% Fibonacci correction of the upside wave shown on graph from where it rebounded to the upside, breaching the descending channel’s resistance.
"The breach supports the EURAUD to return to the general uptrend, confirmed with a successful retest of the breached resistance that resides with 23.6% Fibonacci correction at 1.5230.
"The EURAUD now must breach 1.5510 then 1.5595 to confirm the long-term uptrend with extended targets toward the psychological 1.6000 areas, supported by the MA 50. Stability above 1.5230 is required to prevent the pair from returning to the downside to resume."
