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
Mixed
Oil - US Crude
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
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • China A50 index plunged 1.8% amid sour sentiment across the Asia-Pacific. Beijing will kick off the Chinese Communist Party Plenum this week, setting economic goals for the next 5 years. https://www.dailyfx.com/economic-calendar#today https://t.co/lXQBUkehzE
  • PBoC sets Yuan reference rate at 6.6725 against the US Dollar - BBG
  • #Silver retracing its losses earlier in the session as price carves out a Bear Flag pattern With resistance at $25 holding firm, further losses appear in the offing A daily close below the 21-DMA (24.20) may open the door for a retest of 61.8% Fib support (21.74) $SLVR $SLV https://t.co/rCl3Ms3FB3
  • The Nasdaq 100 index looks set to pull back amid bearish momentum in the near term. The 50-Day Simple Moving Average (SMA) line may serve as an immediate support. Get your #equities update from @margaretyjy here: https://t.co/5Axsg6gAdd https://t.co/rToHnPLSeS
  • $GBPUSD the outlier early in the session, up marginally as UK-EU Brexit negotiators extend talks until October 28 https://t.co/ey92YW4RJw
  • #CrudeOil down 1.95% on the back of tightening #COVID19 restrictions in several European nations $EURUSD nudging marginally lower https://t.co/PUWTfKl08f https://t.co/XuyQOzV6sj
  • Market Snapshot Broad risk-off tilt to kick-off APAC trade #Gold and #CrudeOil prices plunging lower alongside the risk-sensitive $AUDUSD Haven-linked $JPY and $USD moving higher against their major counterparts
  • Wall Street Futures Update: Dow Jones (-0.504%) S&P 500 (-0.536%) Nasdaq 100 (-0.484%) [delayed] -BBG
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/lAFyv1gM0P https://t.co/zSCf8azESa
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am ET on DailyFX! https://t.co/lxd5fZnn4H
EUR/USD Breakdown Fueling DXY, USDOLLAR Strength

EUR/USD Breakdown Fueling DXY, USDOLLAR Strength

2016-10-21 12:20:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- EUR/USD slide below $1.0900 the backbone of recent USD-strength.

- Fed rate expectations have decreased slightly this week.

- See the DailyFX Economic Calendar for Friday, October 21, 2016.

The US Dollar is having another solid week, but to what degree depends on where you look. Why? The US Dollar itself isn't being driven higher by speculation around its own fate; one could argue that markets are viewing the greenback in a less favorable light. Over the past week, Fed funds futures have started to price in a smaller chance of a 25-bps rate hike by December, now at 63% from 68% on Monday.

Instead, given the outsized weighting of the Euro in DXY (57.6%), one needs to look no further than price action in EUR/USD the past 24-hours for an explanation as to why the broad measures of the US Dollar are gaining ground. The greenback can thank ECB President Draghi of course, who dismissed what we thought was a silly notion of the ECB tapering its bond-buying program at yesterday's meeting.

With US elections just around the corner, FX market volatility seems poised to increase steadily over the next few weeks. Likewise, this should translate into greater price swings in linked markets, like interest rates and commodities, for example. See the above video for technical considerations in EUR/USD, GBP/USD, AUD/USD, USD/CAD, Crude Oil, DXY, and the USDOLLAR Index.

Read more: Preview for ECB Rate Decision and Implications for EUR/USD

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

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.

DISCLOSURES