Skip to Content
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. See our updated Privacy Policy here.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
USDOLLAR Index Stalls, EUR/USD Falls as Traders Await ECB

USDOLLAR Index Stalls, EUR/USD Falls as Traders Await ECB

Christopher Vecchio, CFA,

Talking Points:

- EUR/USD continues slip from end of last week.

- AUD/USD remains coiled in symmetrical triangle.

- See the October forex seasonality report that favors US Dollar weakness.

Traders may find that the next few days for EUR/USD (and the Euro more broadly) may be more frustrating that what's transpired the past month. Since the September FOMC meeting, many EUR-crosses have started to price in the increasing probability that the ECB will have to enhance its current QE program or unveil new easing measures altogether (EUR/AUD is down by -7.50% since the September FOMC meeting, while EUR/USD, despite the FOMC's hold, is basically unchanged).

Reflexively, any prolonged period of EUR/USD strength going forward probably raises the probability that the ECB will ease in the coming months, as a stronger trade-weighted Euro will only hurt exporters and dampen inflation. The CFTC’s most recent COT report showed that speculators held 80.6K net-short contracts at the end of the week of October 13, 2015, meaning there is some more room for positioning to build if the ECB signals its intention to ease in the future. Positioning is not in the way of a further short build-up: traders were much more short in August (115.2K contracts) and in March (226.6K contracts).

Until the ECB meeting on Thursday, it might be difficult for repriced Fed rate expectations to hold a significant sway over the market. USD-pairs may take the backseat, if only for a few days, to traders trying to anticipate the ECB's next moves rather than the Fed's.

See the above video for technical considerations in EURUSD, GBPUSD, AUDUSD, USDJPY, and the USDOLLAR Index.

Read more: What Will the Fourth Quarter Hold for the FX Market and Commodities?

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

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