The Euro is trending downwards as we enter today’s European session as investors refrain on placing trades against the EUR/USD currency pair currency pair after the German election outcome and ahead of a speech by the European Central Bank (ECB) Christine Lagarde where she will update the market on the current state of the Eurozone economy.
The race to succeed long-serving Chancellor Angela Merkel has resulted in a fragile parliament with finance minister Olaf Scholz leading the race to take the reins from Merkel. Scholz is seen as a moderate center-left candidate is moderate and the way the results are coming in, we should see a coalition emerge which is Euro positive.
During the American session today the big mover for currency markets will be the release of the US Durable goods figure with analysts expecting a figure of 0.7 percent. This is well up on last month’s figure of -0.1 percent and if analysts are on the mark, the greenback is likely to remain well supported as we head into tomorrow’s Housing price index release from the US.
The EUR/USD currency pair is now entering its 6-day holed up within the trading range between $1.1686 and $1.1743 and is likely to drift down towards the lower band as we approach the release of the durable goods figure later in the day.
The Non-Farm Payrolls release from the US at the end of the week is going to keep traders on edge and may also limit any substantial gains in the Euro as a good figure here will all but guarantee the US Federal reserve will begin tapering before years end.