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EUR/USD – Euro Quiet, Catalonia Crisis Deepens

The euro has edged higher in the Thursday session, as EUR/USD stays close to the 1.18 line. Currently, EUR/USD is trading at 1.1812, up 0.22% on the day. On the release front, there are no major indicators out of the eurozone. In the US, unemployment claims are expected to dip to 240 thousand, while the Philly Fed Manufacturing Index is forecast to slow to 21.9 points. On Friday, Germany releases PPI and the eurozone will publish its current account surplus. The US will release Existing Home Sales and Fed Chair Janet Yellen speaks at an event in Washington.

The crisis in Catalonia continues, as the Spanish and Catalan governments remain entrenched in their positions. The Catalan government has refused to comply with a demand by Madrid to withdraw its declaration of independence, and the central government has responded harshly, saying it will invoke Article 155 of the Spanish Constitution and impose direct control over Catalonia. However, the government must first receive approval from the Senate before it implements this measure, and the Senate is expected to approve the move on Saturday. Madrid has said that it will not invoke this measure if the Catalan parliament calls new elections, but so far there has been no response from Catalan leaders. The deepening constitutional crisis has led hundreds of companies to start leaving Catalonia, and the Standard and Poor’s rating agency has said that the region could face a recession if the situation is not resolve. Investment projects are at a standstill in the region, and if the situation worsens, investors could get nervous and send the euro lower.

Spain to Trigger Suspension of Catalan Autonomy on Saturday

European Union leaders will gather in Brussels on Thursday and Friday. The meeting was expected to focus on Brexit, but with talks with Britain floundering, Brexit will likely take a back step. The EU may do little more than declare that trade talks with London will not begin until there is more progress on other issues, such as the amount Britain will pay when it leaves the club. There are a number of other topics on the agenda, including the crisis in Catalonia, the Iran nuclear agreement, and a proposal to deepen integration among EU members.

EUR/USD Fundamentals

Thursday (October 19)

  • 4:43 Spanish 10-year Bond Auction. Actual 1.63%
  • 8:30 US Unemployment Claims. Estimate 240K
  • 8:30 US Philly Fed Manufacturing Index. Estimate 21.9
  • 10:00 US CB Leading Index. Estimate 0.1%
  • 10:30 US Natural Gas Storage. Estimate 59B
  • Tentative – US Federal Budget Balance. Estimate -0.9B

Friday (October 20)

  • 2:00 German PPI. Estimate 0.1%
  • 4:00 Eurozone Current Account. Estimate 26.2B
  • 10:00 US Existing Home Sales. Estimate 5.30M
  • 19:30 Fed Chair Janet Yellen Speaks

*All release times are GMT

*Key events are in bold

EUR/USD for Thursday, October 19, 2017

EUR/USD Thursday, October 19 at 6:10 EDT

Open: 1.1786 High: 1.1823 Low: 1.1768 Close: 1.1812

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1489 1.1611 1.1712 1.1876 1.1996 1.2092

EUR/USD inched higher in the Asian session. In European trade, the pair edged higher but has retracted

  • 1.1712 is providing support
  • 1.1876 is the next resistance line

Further levels in both directions:

  • Below: 1.1712, 1.1611, 1.1489 and 1.1366
  • Above: 1.1876, 1.1996 and 1.2018
  • Current range: 1.1712 to 1.1876

OANDA’s Open Positions Ratio

EUR/USD remains unchanged this week, consistent with the lack of movement from EUR/USD. Currently, short positions have a majority (63%), indicative of EUR/USD reversing directions and moving to lower ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.



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EUR/USD – Euro Quiet, Catalonia Crisis Deepens

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