Medium-tier reports (starting May 7)
ECB head Draghi’s speech (May 11)
Last Week’s Price Review
The Euro
The euro is the currently the second worst-performing currency of the week (as of 1 pm GMT).

Looking at the overlay of EUR pair above, we can see that the euro’s price action was rather messy. There are even instances of diverging price action, which implies that the euro was somewhat vulnerable to opposing currency price action.
However, if we remove EUR/GBP from the overlay, we can see that EUR pairs did have some roughly uniform price action when they broadly tilted to the downside from Monday until Wednesday.

Anyhow, the euro started the trading week on a weak footing. And as marked in the chart above and as noted in Monday’s London session recap, the apparent catalyst was Germany’s disappointing retail sales report. Although market analysts were also citing Greenback strength as sapping demand for the euro.
The euro continued to slide against most of its peers on Tuesday, even though there were no negative catalysts and despite the good news that Trump postponed imposing tariffs against the E.U., Canada, and Mexico. Market analysts therefore blamed the euro’s slide on Greenback strength once again while also mentioning lingering disappointment after Monday’s poor German data.
The euro then steadied for a while after that before sliding broadly lower again on Wednesday.
Once again, Greenback strength was being cited as the main culprit since the Euro Zone’s Q1 2018 GDP report managed to meet expectations. In fact, it’s possible that the GDP report helped to stall the euro’s slide for awhile. Although euro bulls did eventually give up later on.
After that, the euro began trading mostly sideways. Heck, not even the Euro Zone’s disappointing HICP report was able to entice bears to come out of the woods, even though the 1.2% year-on-year in increase printed in April missed the consensus for a 1.3% rise. More importantly, April’s reading is moving moving away from the ECB’s forecast that headline HICP will increase by 1.4% year-on-year in 2018, as laid out in the March Eurosystem/ECB Staff Macroeconomic Projections.
The Swiss Franc
The Swissy is the third weakest currency of the week (as of 1 pm GMT). This means that the Swissy has been on a losing streak for six consecutive weeks already. Amazing.

Anyhow, EUR and CHF were moving in tandem once again. However, the euro was clearly much weaker on Monday and Tuesday. And it’s this early weakness that’s the reason why the euro fared poorly compared to the Swissy.


