The euro is selling off against the US dollar and the pound this morning, while gaining against inflation-sensitive currencies such as the yen and the Swiss franc. Looking at news, there is no update with regards to German coalition talks or other political events in the Eurozone. Economic data from the region has been supportive for the currency in recent history. Upcoming figures including GDP growth, composite PMIs and retail sales numbers this week should continue to support the common currency. Our short-term and medium-term outlook on the euro remains bullish.
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 133.90. The euro is down against the pound, with EUR/GBP now trading above 0.8810.
This week’s Eurozone events and economic data includes PMIs, Eurozone GDP, and producer prices. On Monday we’ll get Eurozone producer prices. On Tuesday, we’ll see Eurozone Markit Composite PMIs and Retail Sales. On Wednesday, a non-Monetary ECB meeting is scheduled. Thursday is the most important day, and we’ll see Q3 Eurozone GDP growth. On Friday we’ll see German trade figures. Last week, Eurozone inflation and consumer confidence accelerated.
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.