Economic Events:
05:00 EUR CPI (YoY) 2.80% 2.80%
The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
05:00 EUR German ZEW Economic Sentiment -49.20 -53.80
The German Zentrum f?r Europ?ische Wirtschaftsforschung (ZEW) Economic Sentiment Index gauges the six-month economic outlook. A level above zero indicates optimism; below indicates pessimism. The reading is compiled from a survey of about 350 German institutional investors and analysts.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
05:00 EUR ZEW Economic Sentiment -48.70 -54.10
The Zentrum fur Europaische Wirtschaftsforschung (ZEW) Economic Sentiment Index rates the relative six-month economic outlook for the euro zone. On the index, a level above zero indicates optimism, below indicates pessimism. It is a leading indicator of economic health. The reading is compiled from survey of about 350 German institutional investors and analysts.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
05:00 EUR Core CPI (YoY) 1.60% 1.60%
The Core Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, excluding food, energy, alcohol, and tobacco. The data has a relatively mild impact because overall CPI is the European Central Bank’s mandated inflation target.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
Analysis and Recommendations:
EUR/USD Fundamental Analysis Jan. 17, 2012, Forecast
The single currency held close to the daily highs after a French debt auction, the first one after France lost its AAA rating by S&P. The markets were expected to be quiet today as the US markets are closed for the holiday
EUR/USD creep back a bit after lows in the Asian market dropping to 1.2680 area and the pair has spent the end of the market day inside a narrow range below that level, amid thin liquidity. As the markets close in the UK, EUR/USD is quoting around 1.2665, 0.3% above its opening price.
The French government sold EUR8.59 billion of debt on Monday, with borrowing costs declining from levels seen on Jan 9. A sale of 51-week bills produced a yield of 0.406%, down from 0.454% last week. There seems to be no panic in the markets.
There are support levels for tomorrows trading at S1: 1.3023 |S2: 1.3015 |S3: 1.3001 |R1: 1.3045 |R2: 1.3059 |R3: 1.3067
Tomorrow, we can expect the currency pair to dance around without much action, until the economic data is released. If all data is within forecast ranges the markets will react to news from the EU and the ECB.
Originally posted here
