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
GBP/USD
Bullish
USD/JPY
Mixed
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • #Forex Forecast via @DailyFX: US Dollar Technical Outlook on $DXY, $AUDUSD, $USDCAD, $USDJPY & $EURUSD Full Analysis ⬇️ https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/11/17/usd-price-us-dollar-chart-forecast-dxy-audusd-usdcad-usdjpy-eurusd.html
  • Further escalation in Hong Kong will likely bode poorly for risk appetite https://t.co/0NjUd3ahBu
  • How should you trade around event risks and what steps can you take to improve your trading psychology? Find out from @JoelKruger, a trading consultant and mentor. Only on Global Markets Decoded. Missed the episode? Read up here:https://t.co/JWIGJk4vKa https://t.co/WB39x4GP99
  • Poll - Does your personality match your #tradingstyle? Vote and find out from @WVenketas here: https://t.co/vREsUIWSJd https://t.co/Ft0ExAmMpq
  • #Dow Jones hits record high, however, central bank liquidity prompts volatility implosion. #FTSE 100 among underperformers with focus remaining on politics. Get your #equities market update from @JMcQueenFX here: https://t.co/EOFleGSeBp https://t.co/ecAyfSUeAM
  • RT @C_Barraud: 🇪🇺 #ECB’s Muller Says More Assets Could Join Stimulus List in Slump - Bloomberg https://t.co/roGEgu0VTQ
  • With increasing volatility in weather patterns, how might storms, hurricanes and floods rattle the supply chain for petroleum-based products and impact crude oil prices? Find out from @JStanleyFX here:https://t.co/O4dgBl47fq https://t.co/OQYqZAYt9S
  • Currency Strategist,@PaulRobinsonFX is a Swing trader. What is your #tradingstyle? Take the quiz and let us know: https://t.co/LPBOcS0Vtd https://t.co/WzRYeqRhUL
  • Despite what your #tradingstyle is, you should be keeping a trading journal. How can you start keeping a trading journal? Find out: https://t.co/0akgWbyJEw https://t.co/4ehMlN4zv1
  • The Euro’s struggle to move higher against a range of currencies continues and without further support this is likely to continue into the year-end. Get your $EURUSD market update from @nickcawley1 here: https://t.co/myZ7R0eGUb https://t.co/12WJd53Cx4
EUR Breaks Higher To Open Week with Largest Gap Open on Record

EUR Breaks Higher To Open Week with Largest Gap Open on Record

2017-04-24 21:30:00
Tyler Yell, CMT, Currency Strategist
Share:

Will EUR hold the post-election gains?See our forecastto find out!

Talking Points:

  • JPY falls aggressively as outcome of French election seen as risk-on
  • DXY could breakdown on multitude of factors
  • EUR/USD 55-WMA in focus

Join Tyler at his Daily Closing Bell webinars at 3 pm ETto discuss key market developments.

Most attention on Monday is placed squarely and appropriately on European Assets. The DAX has broken to all-time highs and has traded more than 400 points or 3.3% higher. Additionally, German Bund prices on the front end have dropped aggressively sending the yield up 11.9%. The higher yield aligned with EUR/USD pushing higher as EUR/USD weekly open gap was the largest on record per Bloomberg, which brings us to the top chart.

Should the price of Bunds continue to fall, which is predicated on presumed tapering that could be announced by the ECB this Thursday, but most likely, in June we may see the path for a clear move higher in EUR against weaker currencies. In late-April, the weaker currencies have been commodity currencies and the USD. Stronger currencies have been JPY, GBP, & EUR.

The commodity picture could turn the way of Bonds yields, which is to say Bearish. While there remains a lot of managed money netlong certain parts of the commodity landscape, most notably, Crude Oil the price is not responding well.

A further breakdown in key commodities like the base metal Iron Ore or Oil could see a flush out of long positions. The level in Crude Oil that a lot of traders are watching to see if the price holds is ~$48/bbl. A look at the Bloomberg Commodity index shows it trading below the Trendline drawn off the 2016 lows. Commodity pricing is a key input to bond yields rising, and a sustained drop in commodities could lead to suppressed yields.

In the topsy-turvy world, we find ourselves in; this environment of potentially lower yields and lower commodity prices seem to be a unique set-up for higher equity prices. In other words, the perma-bears may have another rough summer. Lower commodities and lower yields mean lower input prices and cheaper borrowing, which could continue to support earnings.

Interested in seeing how retail traders are exposed in key markets?Find out here!

Closing Bell’s Top Chart: April 24, 2017, EUR/USD Breaks Higher To 55-WMA, Bund Drop Could Assist

EUR Breaks Higher To Open Week with Largest Gap Open on Record

This Week’s Main Event:

Given that the French Election outcome of a Macron/ Le Pen run-off on May 7th was seen as risk on (“It is a bull market, ya’ know) traders should know turn focus to Draghi on Thursday. Thursday’s ECB meeting is not expected to bring about a change in the stance of the ECB, but if Draghi acknowledges the up-tick in data, we could see Bullish support for EUR/USD. While Economic Data from Europe has consistently beaten expectations for the past 6-months, June’s ECB meeting will provide new economic forecasts from the ECB, which will provide a clear commentary on the ECB message going forward.

IG Trader Sentiment Highlight:GER30 Bears Fight Risk-On Rally

EUR Breaks Higher To Open Week with Largest Gap Open on Record

Germany 30: As of April 24, retail trader data shows 19.4% of traders are net-long with the ratio of traders short to long at 4.16 to 1. The number of traders net-long is 31.0% lower than yesterday and 38.0% lower from last week, while the number of traders net-short is 86.4% higher than yesterday and 108.8% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Germany 30 prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Germany 30-bullish contrarian trading bias. (Emphasis Mine)

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

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

DISCLOSURES

News & Analysis at your fingertips.