The single European currency has been stuck in a tight range against its main competitor, the US dollar, this week. As of Friday, the pair was hovering at just under the 1.18 level – with a rate of 1.17968 seen at one stage across the day. According to analysts, the underlying trends on the price chart at the moment are not showing a clear direction one way or the other.
The euro has found it difficult to surpass the range spanning from 1.1790 to 1.1800. Traders have observed it trying to get past this level on a number of occasions, but it appears that the resistance is too strong – at least for now. According to strategists, the pair may now find itself going in the other direction and moving to the lower end of the 1.17 spectrum. If it did so, it could see a support level of 1.1720 to 1.1730 appear on the horizon.
Despite the uncertain picture for the currency, one strategist claimed that most clients are – on the whole – going net short on the pair. A series of key economic calendar releases over the next few days could be what catalyses some sort of significant move for the pair. On Monday, there may well be a slowdown in dollar trading given that the US is celebrating Columbus Day.
On Tuesday, however, there will be an increase in action – especially in Europe. At 6am GMT, there will be a release from Germany looking at consumer prices in September. Year on year, this is due to hold firm at -0.2%. Month on month, meanwhile, this is due to drop from -0.2% to -0.1%. At 9am GMT, there will be an economic sentiment release for October covering the whole of the bloc. This is due to show a change from 73.9 to 70.5.
Heading over the Atlantic, meanwhile, a US consumer price index for September is expected to come out at 12:30pm GMT. This is due to show a month-on-month dip from 0.4% to 0.2%. Year on year, however, the gap is widely expected to be a little smaller. It is expected to go from 1.3% to 1.2%.
On Wednesday of next week, there will be an industrial production figure for August out at 9am GMT. Year on year, this was last recorded at -7.7%. Month on month, however, it was recorded at 4.1%. In the US, producer price index information for September will be out at 12:30pm GMT. This is expected to show a change from 0.3% to 0.2%.
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