The euro ended the day flat yesterday and is gaining this morning. Economic data from the Eurozone released yesterday mostly matched expectations. Economic sentiment and consumer confidence came within average estimates. However, services and industrial sentiment was lower than expected. As data points to continued GDP growth in the Eurozone, the euro remains in a bullish trend. Looking at political news, coalition talks between Merkel's CDU and the Social Democrats have yet to bear fruit. According to Bloomberg, Merkel and her counterpart (Schulz) are scheduled to meet later today.
The EUR/USD exchange rate is now trading above 1.1860. Looking at EUR/JPY, the pair is up today and is currently trading just above 133.10. The euro is down against the pound, with EUR/GBP now trading above 0.880.
This week's economic data from the Eurozone includes consumer confidence and inflation figures. German consumer confidence missed expectations (10.7 vs. 10.8 expected). Eurozone economic sentiment met expectations (114.6) as did consumer confidence (0.1). German CPI figures were above expectations (1.8% vs. 1.7% expected) while French CPI met expectations (1.3%). German retail sales widely missed expectations (-1.4% vs. 2.8% expected). Later today, we'll see German unemployment, and Eurozone CPI. Finally on Friday, we'll see German and Eurozone Markit manufacturing PMIs. Last week, strong data helped the ongoing euro rally.
As the euro strengthens on good economic data, we are upgrading the currency to bullish in the short-term. Looking at various technical indicators, the currency is trading within a normal range. This is based on a daily chart of the euro currency index.
As monetary policy expectations and economic growth power the euro, we are upgrading the outlook to bullish in the medium-term. Note that the euro is trading within normal ranges. Our analysis is based on various technical indicators when looking at a weekly chart.