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  • US Dollar strength has continued today, with the $DXY hitting an intraday high around 91.20. The index is now trading slightly lower, currently around 91.05, as markets wait for Powell's speech at 12:05 EST. $USD https://t.co/rxdvVhXGVX
  • $USDCAD is weaker in the aftermath of OPEC+'s decision to hold output steady, falling to trade back around the 1.2600 level. The pair fell to its lowest level in nearly three years during last week's volatility, rebounded to a high of 1.2730, and has then edged lower. $USD $CAD https://t.co/QBVe8X5nVO
  • Russia reportedly has been given an exemption from OPEC+ supply deal - Delegates
  • The Canadian Dollar is surging alongside the rise in oil prices following OPEC+'s decision to hold output steady. $CADJPY has risen above 85.00 to trade at its highest levels since late 2018. $CAD $JPY https://t.co/YzikqjWyvT
  • $WTI Crude Oil is extending its gains, rising above 64.00 to trade at its highest levels in over a year. $OIL $USO https://t.co/7aFsMmJd7x
  • OPEC+ decides not to hike output by 500kbpd in April - Delegate Oil prices at highs of the day https://t.co/UBAtzuEs0b
  • Forex Update: As of 15:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.29% 🇨🇦CAD: 0.29% 🇦🇺AUD: 0.21% 🇪🇺EUR: -0.26% 🇯🇵JPY: -0.53% 🇨🇭CHF: -0.56% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/dULwFuQVcF
  • OPEC+ is close to keeping output unchanged in April - Delegates #OOTT
  • Indices Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.09% US 500: 0.04% France 40: 0.04% FTSE 100: -0.13% Germany 30: -0.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/raVqHjfXWM
  • RT @Amena__Bakr: Saudi Arabia is proposing a rollover for April and May- delegates #OOTT #opec
Eurozone Political Drama and Softer Global Data to Weigh on Sentiment

Eurozone Political Drama and Softer Global Data to Weigh on Sentiment

Joel Kruger, Technical Strategist
  • Risk rallies viewed as technical corrections; look to sell
  • Euro consolidating above 1.3000 ahead of next drop
  • Investors digesting implications of latest French and Greek elections
  • Spain back in focus as the country attempts to rescue local bank

Although we have seen a bit of a bounce in risk correlated assets, we contend that the rally is nothing more than some minor consolidation ahead of the next wave of risk liquidation. The Euro managed to close back above 1.3000 on Monday, but from here, we expect any additional rallies to be very well capped ahead of 1.3200 in favor of an eventual retest of the 2012 lows from January at 1.2620. Market participants are still digesting the weekend election results out of France and Greece, and there is a good deal of concern as to whether the newly elected governments will adhere to the austerity measures imposed to ease the debt crisis. In Greece, the situation is highly uncertain, with the lack of a clear majority potentially creating a situation where austerity measures might be significantly reduced in order to appease the opposition. Elsewhere, Spain is back in the headlines, as the country attempts to rescue its third largest bank. Moving on, economic data continues to show signs of weakness, and the softer results once again highlight the fragile state of affairs in which the global economy lies. Overall, we expect risk correlated currencies and global equities to be very well offered on any rallies in favor of more bearish price action.

ECONOMIC CALENDAR

Eurozone_Political_Drama_and_Softer_Global_Data_to_Weigh_on_Sentiment_body_Picture_5.png, Eurozone Political Drama and Softer Global Data to Weigh on Sentiment

TECHNICAL OUTLOOK

Eurozone_Political_Drama_and_Softer_Global_Data_to_Weigh_on_Sentiment_body_eur.png, Eurozone Political Drama and Softer Global Data to Weigh on Sentiment

EUR/USD: The market has finally cleared some key support by 1.3000 and the break opens the door for deeper setbacks over the coming days towards the 2012 lows from January at 1.2620. However, short-term technical studies will need to unwind from oversold readings before we are to see any extended declines below 1.3000, and we recommend looking to sell into rallies into the 1.3150-1.3200 where a fresh lower top is now sought. Ultimately, only back above 1.3300 would delay.

Eurozone_Political_Drama_and_Softer_Global_Data_to_Weigh_on_Sentiment_body_usd.png, Eurozone Political Drama and Softer Global Data to Weigh on Sentiment

USD/JPY: The latest pullback from the 2012, 84.20 highs is viewed as corrective and it looks as though the market could still see a bit more weakness before considering the possibility for the formation of a medium-term higher low. Overall, this is a market that has undergone a major structural shift in recent months and we now see the pair in the early stages of a longer-term up-trend. Ultimately, only a weekly close back under 78.00 would negate.

Eurozone_Political_Drama_and_Softer_Global_Data_to_Weigh_on_Sentiment_body_gbp.png, Eurozone Political Drama and Softer Global Data to Weigh on Sentiment

GBP/USD: Finally starting to see signs of a medium-term top and potential 2012 high after the market has stalled and retreated from the 1.6300 area. Key support now comes in by 1.6075 and a break and close below this level will confirm bearish bias and accelerate declines towards 1.5800 further down. Ultimately, only a break back above 1.6300 would negate and give reason for reconsideration.

Eurozone_Political_Drama_and_Softer_Global_Data_to_Weigh_on_Sentiment_body_usd_1.png, Eurozone Political Drama and Softer Global Data to Weigh on Sentiment

USD/CHF: Our core constructive outlook remains well intact with the latest setbacks very well supported by psychological barriers at 0.9000. It now looks as though the market could be looking to carve a fresh higher low, and we will be looking for additional upside back towards the recent range highs at 0.9335 over the coming sessions. Above 0.9335 should then accelerate gains towards the 2012 highs by 0.9600 further up. Ultimately, only back under 0.9000 delays and gives reason for pause.

--- Written by Joel Kruger, Technical Currency Strategist

To contact Joel Kruger, email jskruger@dailyfx.com. Follow me on Twitter @JoelKruger

To be added to Joel Kruger’s distribution list, send an email with subject line “Distribution List” to jskruger@dailyfx.com

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