Where Is Euro Heading Next?
Martin Kay | Oct 20, 2014 09:35AM ET
There was some relief for the Euro during this past week, as it traded higher against the U.S. dollar and closed the week on the positive note. The pair opened the week around the same price point, but the main concern here is that the Euro buyers are not willing to push the shared currency higher. Basically, the pair was seen consolidating in a range today. There were a couple of economic releases lined up during the London session in the Euro area, including the German producer prices and Italian industrial orders data. The first in the line was the German Producer Price Index, which was released by the Statistisches Bundesamt Deutschland. The market was expecting the German PPI to increase by 0.1% in September 2014, compared to the last month’s decline of 0.1%. However, the outcome missed the mark, and remained flat in September 2014.
If we consider the yearly change, then the market was expecting the German PPI to decline by 1.0%, compared with the corresponding month of the preceding year. The outcome was as expected, as the index of producer prices for industrial products fell by 1.0%. This was not seen on the negative side by the Euro buyers, as there was hardly any reaction from them. The EUR/USD pair continued to trade in a range.
Italian Industrial Orders Data
There was one more event lined up in the Euro area -- i.e. the Italian Industrial Orders data was released by the National Institute of Statistics. The market was expecting the Italian Industrial Orders to decrease by 1% in August 2014, compared to the last month’s decline of 1.5%. However, the outcome was better than expected as the Italian seasonally adjusted industrial new orders index increased by 1.5%, which is a lot more compared to the last time decline of 1.5%. Similarly, the Italian seasonally adjusted industrial sales increased by 0.4%, compared to the previous month’s decline of 1.1%. Overall, the outcome was on the positive side, which brought some relief for the investors.
There is a major support formed around the 1.2720-40 area, which is holding the downside in the EUR/USD pair. On the upside, the pair needs to clear the 1.2800 hurdle as it has struggled time and again around the mentioned level. A break and close above the same might call for more gains in EUR/USD in the coming days.
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