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
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
More View more

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • The US Dollar remains in consolidation mode against the Philippine Peso and Indian Rupee. Will the Singapore Dollar weaken as $USDSGD rising support holds ahead? Find out from @ddubrovskyFX here: https://t.co/HZ8Loqj3Ey https://t.co/6PCFkdj3ka
  • Follow @DailyFXedu for your regular #webinar updates with @DailyFX analysts and catch up on the webinars you missed. https://t.co/Da10QUg9r1
  • Greed has proven to be a hindrance more than assistance for traders. How does greed lead to #FOMOintrading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/Le8Qx6OOwV
  • $GBPUSD at the moment break-even straddles = 152pips meaning that for option traders to realize gains, the spot price must see a move greater than 152pips. Get your market update from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/RXCBwHGluG
  • $EURGBP has fallen over 6% since August and is now rapidly approaching a critical support level not reached since May. Will a break below accelerate the aggressive selloff? Find out from @ZabelinDimitri here: https://t.co/CBM8Fg7vM0 https://t.co/0yDnEpzQqR
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
  • How can confidence in trading help with avoiding #FOMOintrading? Find out from @WVenketas here: https://t.co/MY7j9ISn4S https://t.co/n7XwfiDZz2
Why the Euro, Dollar Rally After the ECB? Leaving EURUSD at Support

Why the Euro, Dollar Rally After the ECB? Leaving EURUSD at Support

2019-07-25 23:30:00
Daniel Dubrovsky, Analyst

Asia Pacific Market Open Talking Points

  • Euro recovered despite dovish ECB rate decision as Draghi calmed dovish bets
  • US Dollar saw demand as bond yield gains spread into North America on data
  • EUR/USD was unable to clear well-defined support, is it about to bounce again?

Not sure where the US Dollar is heading next? We recently released the third quarter US Dollar fundamental and technical forecast!

The Euro was at one point on its way to close at its lowest point against the US Dollar since 2017 as the ECB rate decision seemed to prepare markets for further stimulus later this year. Not only did policymakers see rates at present or lower levels for “as long as needed”, but also the central bank showed that it is looking to examine options for "potential new asset buying", also known as quantitative easing.

Looking at overnight index swaps, chances of a 10 basis point rate cut now stand at about an 85% probability for September, with further easing at even odds by year-end. Afterwards, ECB’s President Mario Draghi also had plenty of gloomy things to say about the economic outlook such as it is “getting worse and worse”, highlighting particular concerns over manufacturing.

Yet, accompanying his speech was not only a reversal in EUR/USD, but also in Eurozone front-end government bond yields. This signaled that dovish bets were underwhelmed and were contained by Mr Draghi. He did note that there were different nuances of views on parts of a package as risks of a recession are “pretty low”. As such, this means we will have to wait until September for further specifics and data.

There was also a rally in USD eyeing an equally-weighted index against its top 4 liquid major counterparts. This occurred as local front-end government bond yields climbed as the S&P 500 ended the day 0.53% to the downside. Better-than-expected US durable goods orders, coupled with ECB disappointment, likely fueled a comeback in the Greenback as anti-fiat gold prices weakened.

Rising Bond Yields Pressured Equities After ECB, US Durable Goods Orders

Rising Bond Yields Pressured Equities After ECB, US Durable Goods Orders

Friday’s Asia Pacific Trading Session

While Wall Street underperformed, S&P 500 futures are little changed heading into Asia Pacific trading hours. Some pessimism in equities from earlier might have been cooled as the US House of Representatives passed a debt-limit and budget deal, sending it to the Senate. A relatively quiet economic docket ahead places the focus for currencies on risk trends.

EUR/USD Technical Analysis

The EUR/USD wasn’t able to clear critical support which is a range between 1.1110 and 1.1132. This area is the lows achieved back in May and June of 2017. In the past, failure to breach support resulted in a temporary rebound, but the dominant downtrend held. Keep in mind that past performance is not indicative of future results. Near-term resistance appears to be at 1.1201.

EUR/USD Daily Chart

Why the Euro, Dollar Rally After the ECB? Leaving EURUSD at Support

Charts Created in TradingView

FX Trading Resources

--- Written by Daniel Dubrovsky, 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.


News & Analysis at your fingertips.