Euro opened the week broadly lower on verbal intervention from ECB officials over the weekend. ECB president Draghi warned on Saturday that "a strengthening of the exchange rate requires further monetary stimulus" and that's "an important dimension for our price stability". He clarified that "exchange rate is not a policy target" but it's "important for price stability and growth". ECB governing council member Noyer also said that "the stronger the euro is, the more accommodative policy is needed." And Noyer also emphasized that "this evolution of the euro is not only a handicap for growth but equally for the return of inflation toward its target of 2%."
Technically, EUR/USD made a temporary top at 1.3905 and some consolidations could be seen. But near term outlook stay bullish for another rally to 1.3966 resistance later. EUR/JPY is also staying above 140.07 support. EUR/GBP is held in range of 0.8230/8314. EUR/AUD is also staying in tight range above 1.4652. Intraday bias in these pairs are neutral for the moment and the euro would likely engage in some consolidations first.
On the data front, Eurozone industrial production will be featured in European session. US will release retail sales and business inventories. Here are some highlights for a holiday shortened week:
- Tuesday: RBA minutes; UK CPI, PPI; German ZEW; US CPI, Empire Statement Manufacturing, TIC capital flow, NAHB housing market index
- Wednesday: China GDP; UK employment; Swiss ZEW; Eurozone CPI; US housing starts and building permits, industrial production, Fed's Beige Book; BoC rate decision
- Thursday: Japan consumer confidence; German PPI; Canada CPI; US jobless claims, Philly Fed survey