News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bearish
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
More View more
Real Time News
  • The AB=CD pattern is simple once you know how to spot it and draw the proper Fibonacci retracements. Make your trading strategy as simple as ABCD here: https://t.co/AKmlmaAZBS https://t.co/LpRs8gqhaO
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/lFoPX5pbyH
  • RT @IGSquawk: Merkel proposing one month lockdown. #DAX 11882 -1.50% https://t.co/7HMwsSX7M1
  • Wall Street Futures Update: Dow Jones (-1.68%) S&P 500 (-1.39%) Nasdaq 100 (-1.04%) [delayed] -BBG
  • A forex trader is strategic, disciplined and always switched on to the markets. Learn how to build an FX mindset here: https://t.co/ujEpfmO6C4 https://t.co/7CMyy8GhkR
  • 🇿🇦 Inflation Rate YoY (SEP) Actual: 3% Expected: 3.1% Previous: 3.1% https://www.dailyfx.com/economic-calendar#2020-10-28
  • Big risk-off shift early in European trade Haven-associated $USD and $JPY storming higher as the risk-sensitive $AUDUSD slips lower $EURUSD plunging lower as several European governments tighten restrictions amid a surge of #Covid19 infections https://t.co/Dc5JWfajUf
  • 🇿🇦 Inflation Rate YoY (SEP) Actual: 3.0% Expected: 3.1% Previous: 3.1% https://www.dailyfx.com/economic-calendar#2020-10-28
  • 🇫🇷 Consumer Confidence (OCT) Actual: 94 Expected: 93 Previous: 95 https://www.dailyfx.com/economic-calendar#2020-10-28
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.54%, while traders in NZD/USD are at opposite extremes with 71.21%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/cDHk860zOc
EURUSD Rate Vulnerable to Strong U.S. Consumer Price Index (CPI)

EURUSD Rate Vulnerable to Strong U.S. Consumer Price Index (CPI)

2019-05-09 07:05:00
David Song, Strategist
Share:

EUR/USD holds a narrow range despite an unexpected uptick in German Industrial Production, but the rebound following the Federal Reserve meeting may start to unravel should fresh data prints coming out of the U.S. economy highlight a diminish threat for below-target inflation

Image of DailyFX economic calendar

Updates to the U.S. Consumer Price Index (CPI) may shake up the near-term outlook for dollar as the headline and core reading are expected to pick up in April.

Signs of sticky price growth may force the Federal Open Market Committee (FOMC) to implement a rate-hike in 2019 as ‘incoming data since our last meeting in March have been broadly in line with our expectations,’ and it remains to be seen if Chairman Jerome Powell & Co. will continue to project a longer-run interest rate of 2.50% to 2.75% as Fed officials are slated to update the Summary of Economic Projections (SEP) in June.

Image of fed fund futures

Keep in mind, Fed Fund Futures still show a greater than 50% probability for a December rate-cut as the FOMC plans to taper the $50B/month in quantitative tightening (QT), but little to no indications for a change in regime may boost the appeal of the U.S. dollar as the ‘baseline view remains that, with a strong job market and continued growth, inflation will return to 2 percent over time.’

In turn, a material uptick in the headline and core CPI may generate a bullish reaction in the greenback, with the monthly opening range in focus for EUR/USD as the exchange rate appears to be stuck in a narrow range.

EUR/USD Rate Daily Chart

Image of eurusd daily chart

The broader outlook for EUR/USD remains tilted to the downside as both price and the Relative Strength Index (RSI) continue to track the bearish formations from earlier this year, with the near-term outlook mired by the failed attempt to push back above the Fibonacci overlap around 1.1270 (50% expansion) to 1.1290 (61.8% expansion).

In turn, will keep a close eye on the monthly opening range, with lack of momentum to hold above the 1.1190 (38.2% retracement) to 1.1220 (78.6% retracement) region raising the risk for a move towards 1.1140 (78.6% expansion). Next downside region of interest comes in around the 1.1100 (78.6% expansion) handle followed by the 1.1040 (61.8% expansion) area.

For more in-depth analysis, check out the 2Q 2019 Forecast for the Euro

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES