EUR/USD - Range Bound

February 23, 2018 8:47AM CST

We received Eurozone inflation data in the overnight, and it slowed -0.9% vs 0.4% m/m and 1.3% vs 1.4% y/y.  This is in the wake of a softer German PPI reading (2.1% vs 2.3% prior y/y) and ZEW (Business Conditions) Survey reading of 92.3 vs a prior reading of 95.2 m/m and 17.8 vs 20.4 prior y/y .  For the time being our outlook on Europe and the Euro currency is tilting bearish.  A stronger exchange rate vs the USD is not exactly a boon for Europe’s exporting business climate.  If you take a look at a MCH Euro Weekly Chart we have been making a series of lower highs and lower lows for the past four weeks, but largely trapped inside a 1.25-1.22 trading range.  Technically speaking, a break of the low end of the range (1.2230), could drive the Euro back down towards 1.2075. The fundamental catalyst would likely be a more dovish leaning Mario Draghi as a result of weaker economic data.  For the time being, our recommendation is to manage the range of 1.25-1.22. The longer term (3-6 month) Euro chart remains bullish trend, but beware of a near-term correction higher in the USD and and softer economic data releases out of Europe.

Euro Mar '18 Daily Chart


RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.