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
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
Oil - US Crude
Bullish
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
Bullish
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
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
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
More View more
Real Time News
  • Emerging market currencies haven’t been treated equally by the effects of global contagion, even if most have suffered to some degree. However withdrawal of investment flows could hit them all. Get your market update from @DavidCottleFX here:https://t.co/QzNoNYgMgP https://t.co/j71z9WYeBm
  • My trading video for today: "S&P 500 and $AUDUSD Await Trump China Presser, $EURJPY Climbs on Stimulus" https://www.dailyfx.com/forex/video/daily_news_report/2020/05/29/SP-500-and-AUDUSD-Await-Trump-Statement-EURJPY-Climbs-on-Stimulus.html?ref-author=Kicklighter&QPID=917719&CHID=9
  • Wall Street Futures Update S&P 500: -0.21% Dow Jones: -0.30% NASDAQ 100: -0.12% (delayed) - BBG
  • The US Dollar could rise against #ASEAN currencies such as the Singapore Dollar as US-China tensions seem to escalate. The Indian Rupee is also looking ahead of local 1Q GDP data.Get your market update from @ddubrovskyFX here:https://t.co/LkEFJViPWY https://t.co/I2HhrD40vi
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 0.33% Gold: 0.12% Oil - US Crude: -1.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/3wq4zdqxfp
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.22% 🇨🇭CHF: 0.07% 🇪🇺EUR: 0.05% 🇦🇺AUD: -0.08% 🇨🇦CAD: -0.11% 🇳🇿NZD: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/XQf8MSJFP6
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.13%, while traders in US 500 are at opposite extremes with 79.44%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/qNiQK9ANUG
  • RT @DanielGMoss: Historical comparison of the #ASX200 during the #GFC and the #GreatLockdown may offer a glimpse of what may lie ahead for…
  • Excellent take on the #ASX200 from my colleague @DanielGMoss using historical comparisons to the 2008 GFC. Highly recommend a read below! 👇 https://t.co/aEJq67wBMT
  • The $AUD may suffer as relations between Australia and China deteriorate amid dwindling growth prospects. Euro traders will be closely watching progress in talks about a €500b recovery fund proposal. Get your market update from @ZabelinDimitri here:https://t.co/LkEFJViPWY https://t.co/1X34MD9j2R
EUR/USD Topping Potential Good News for DXY Index

EUR/USD Topping Potential Good News for DXY Index

2017-08-17 12:00:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- The Euro is coming off of extreme bullish sentiment readings, which suggest that buyers are exhausted and profit taking is due.

- A move in EUR/USD below 1.1700 would increase the likelihood of a DXY Index break above 94.29, the July 26 outside engulfing bar.

- Retail crowd positioning continues to shift as the US Dollar rebound has gathered pace in August.

Upcoming Webinars for Week of August 20 to August 25, 2017

Monday at 7:30 EDT/11:30 GMT: FX Week Ahead

Wednesday at 6:00 EDT/10:00 GMT: Mid-Week Trading Q&A

Thursday at 7:30 EDT/11:30 GMT: Central Bank Weekly

See the full DailyFX Webinar Calendar for other upcoming strategy sessions

Despite trading softer around the July FOMC minutes release yesterday, the US Dollar has proven resilient over the past 24-hours, having erased all of Tuesday's losses. While the greenback's technical posture is improving, the DXY Index has yet to clear a key technical level required before we can say that the US Dollar has bottomed in the near-term.

With that said, the continued struggle by EUR/USD to maintain its rally is seen as good news for the DXY Index. After all, the Euro constitutes 57.6% of DXY. A quick examination of the daily timeframe suggests EUR/USD has been treating the former August 2015 high at 1.1714 as support over the past three weeks. A close below said level would also constitute a break of the uptrend from the June and July 2017 swing lows.

Should EUR/USD trade lower and provide the boost the DXY Index needs, a look at three separate sentiment indicators, including our in-house sentiment reading, suggest that the Euro is coming off of a bullish extreme in sentiment (which supports the notion of EUR/USD topping). Market positioning would dictate that any weakness in the Euro in the near-term would be of the profit taking variety.

Even though positioning has moderated in recent weeks, the Euro long trade remains crowded (relatively speaking). According to the CFTC’s latest COT report, there were 93.7K net-long contracts held by speculators in the futures market for the week ended August 8, just off of the highest level since the week ended May 3, 2011 (when EUR/USD peaked just below 1.5000).

Another indicator derived from the futures market suggests Euro sentiment is coming off of a bullish extreme. The Daily Sentiment Index (DSI), which aggregates the opinions of active traders in US futures markets, is measured on a scale of 0-100%. High readings (i.e. greater than 90%) suggest that a short-term top is developing or has been made while low readings (i.e. less than 10%) suggest that a short term bottom is developing or has been made. Since August 4, Euro DSI has fallen from 93% to 74% yesterday, suggesting that a near-term topping process is under way.

See the above video for technical considerations in the DXY Index, EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD, and Gold.

Read more: Here’s When We’ll Know the US Dollar Has Bottomed

--- Written by Christopher Vecchio, CFA, Senior 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

News & Analysis at your fingertips.