We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bullish
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • US 30-Year Treasury Yield is down this morning to 2.35%
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 9.82% Silver: 2.20% Gold: 0.67% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/szFjFVTfIF
  • 🇺🇸 USD NAHB Housing Market Index (SEP), Actual: N/A Expected: 66 Previous: 66 https://www.dailyfx.com/economic-calendar#2019-09-17
  • US Dollar Price Outlook: EUR/USD, GBP/USD, USD/CAD, USD/CHF https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2019/09/16/us-dollar-price-outlook-eur-usd-gbp-usd-usd-cad-usd-chf-js52-usd-chart.html https://t.co/dM4YKDP9qd
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.95%, while traders in France 40 are at opposite extremes with 81.39%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/SlJfOQwCAI
  • $ES_F aiming to close the gap? https://t.co/FLkoN4uukV
  • Commodities Update: As of 13:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 9.24% Silver: 2.02% Gold: 0.70% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/nfExwfKu63
  • $CAD: Loonie loving higher #oil prices. Canadian Dollar strengthening broadly today, as the economy is a major net exporter of crude. Gains most notable versus the #Euro with the Eurozone being a large net oil importer. https://t.co/7Un1GNkZDw
  • $AUD Australian Dollar edges lower. Souring market sentiment typical bodes ill for the Aussie, and today’s move in response to weak China industrial production data and the #SaudiOilStrike seems to be no exception. Also have #RBA minutes event risk on deck - due Monday 20:30 GMT. https://t.co/Pw5iz3tt8w
  • Crude #oil futures saw a record spike higher at the Asia open, with Brent crude gapping higher by 18% to hit 4-month highs following drone attacks on Saudi’s Abqaiq oil facility. Where is crude heading? Get your market update from @JMcQueenFX here: https://t.co/sjJM12uj6U #OOTT https://t.co/YpyUvp8lHx
Fed, EU Politics Paves Way for EUR/USD Short Targeting August Low

Fed, EU Politics Paves Way for EUR/USD Short Targeting August Low

2018-09-28 02:10:00
Daniel Dubrovsky, Analyst
Share:

EUR/USD Trading Strategy: Pending Short at 1.1672

  • Italian budget worries sent EUR/USD under trend line, more EU political jitters to come
  • Meanwhile the Fed continues to be on a relatively more hawkish path compared to ECB
  • With prices below the optimal entry point, an order has been placed to sell Euro at 1.1672

Build confidence in your own EUR/USD strategy with the help of our free guide!

Fundamental EUR/USD Short Argument

On September 27th, the Euro experienced its largest decline against the US Dollar on the daily chart since August 10th as it fell 0.88%. This was largely in part due to increased Italian political jitters as the anti-establishment parties agreed on a budget proposal that is at odds with Eurozone fiscal rules. Italian government bond yields rallied, signaling a rising premium for the associated risk.

The proposal put together by the nationalist League and populist Five Star Movement could end up weighing against the Euro in the medium-term if the European Commission ends up approving the plan. This is because other nearby nations, such as Greece, may question their leniency which could give more rise to economic nationalism at the expense of market financial stability. Political gridlock in Sweden is also a threat for EUR.

Meanwhile, from a yield and fundamental perspective the US Dollar is at a clear advantage against its European counterpart. The Fed has just raised rates to a range of 2.00 – 2.25 percent while the ECB is only just preparing to exit its asset purchase program potentially by the end of this year. For the latter, rates may be left unchanged through the summer of 2019 while the former keeps hiking perhaps three times next year.

EUR/USD Technical Analysis and Trade Setup

The Euro has remained in a persistent consolidation mode against the US Dollar for the better part of the past four months or so. However, there is a sign on the EUR/USD daily chart that its next leg could be lower. The pair has broken under a near-term rising support line from September 10th and it was an aggressive move. This now exposes a horizontal range of support between 1.1510 and 1.1526.

But EUR/USD may fall beyond that to the August 15th low at 1.1301 if the fundamental argument outlined above prevails. With that in mind, entering short seems like the way to go to capitalize on what could be Euro weakness in the coming days and weeks. However, prices are under the ideal setup for a 3-to-1 risk-reward ratio at the time of this writing.

Using the logic of a daily close stop above 1.17822 for this setup (just under the September highs), we have placed an order to short EUR/USD at 1.1672. The target of this position is just above the August 15th low at 1.13417. We will be closely monitoring this setup which may change if the entry point is not reached. You may follow me on twitter @ddubrovskyFX for updates to this trade setup.

EUR/USD Daily Chart

Fed, EU Politics Paves Way for EUR/USD Short Targeting August Low

FX Trading Resources

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.