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
Subscribe
Please try again
EUR/USD
Bearish
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
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
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Bank of Japan to mull widening of its long-term yield band -BBG $USDJPY
  • While the rise in longer-dated Treasury yields have been impressive as of late, March highs remain a key focus for resistance The medium-term uptrend remains intact, maintained by rising support from August Fading fiscal stimulus expectations (size) may sour yields ahead https://t.co/L3vBcF0ts7
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/vFJ8zmphMm
  • While the US Dollar has been holding its ground, its downside bias against the Singapore Dollar, New Taiwan Dollar Thai Baht and Indonesian Rupiah remains intact as it hovers at support. Get your market update from @ddubrovskyFX here: https://t.co/p7gAztWuVG https://t.co/zB1pOS6U4D
  • The $VIX is now running 227 trading days above the 20 handle. It is also working its way quickly into a dead-end descending triangle. These don't really break lower... https://t.co/39Pr7YrQ08
  • WTI Crude amongst the many market participants taking a hit today, down almost 3% $WTI $USD https://t.co/eg2phm1wUO
  • The power of suggestion: even though the market recognized the mistake with mixing Tesla founder Musk's suggestion to use the Signal app with the stock SIGL, it is still trading >2,000% above pre-remark levels and maintains heavy volume. Us speculators are an interesting people
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.07% 🇨🇭CHF: -0.35% 🇪🇺EUR: -0.65% 🇨🇦CAD: -0.75% 🇦🇺AUD: -0.95% 🇳🇿NZD: -1.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/6NZVebT00L
  • one final $BTCUSD chart ahead of the weekend bc I think this is going to remain on the move. 35k support has held for now, but prices are testing a big zone of prior resistance (same that held the high on tues morning). break down/out levels in purple below $BTC #Bitcoin https://t.co/TeLrBYJXty https://t.co/MewVjXNrRT
  • Silver selling off during trade, now down over 3% $XAG $USD https://t.co/V69rLJMYcC
DXY Index Sideways Grind Continues ahead of BOE, ECB Tomorrow

DXY Index Sideways Grind Continues ahead of BOE, ECB Tomorrow

2018-09-12 20:00:00
Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- Reports that the ECB will downgrade its economic forecasts tomorrow has dragged down EUR/USD today.

- Nothing new is expected from the BOE tomrrow as investors await a potential Brexit deal culminating in the next weeks, paving the way to an EU-UK summit in November.

- Retail trader sentiment continues to favor more US Dollar upside in the near-term.

See our longer-term forecasts for the US Dollar, Euro, British Pound and more with the DailyFX Trading Guides

The US Dollar (via the DXY Index) has been treading water the past few days, essentially biding time since the start of September: the DXY Index closed at 95.10 on August 31, and at 95.10 is where it opened up today. While traders continue to discuss intense headlines regarding the US-China trade war or emerging market contagion, the fact of the matter is that these issues have made for better headlines than actual market moving events in recent days.

As such, attention in the short-term is quickly shifting to the two central bank decisions tomorrow morning from the Bank of England and the European Central Bank (the latter of which I'll be covering live). While neither central bank is expected to unveil any new policies, the details at the margin will dictate whether or not tomorrow yields greater volatility among EUR- and GBP-crosses.

For the BOE, a policy meeting that doesn't produce a new Quarterly Inflation Report reduces the likelihood of a significant move altogether. But the policy decision comes against the backdrop of purported progress on the Brexit front, where several times just this week we've heard that a deal could materialize in the coming weeks.

We fully expect the BOE to show deference to the Brexit process, opting to say and do little before an EU-UK Brexit plan is agreed upon. But against an improving risk backdrop regarding the likelihood of a hard Brexit, traders will be likely hunting for clues to see how quickly the next BOE rate hike will arrive in 2019; it is not likely that the BOE signals another 25-bps hike when it releases its next QIR in November.

For the ECB, the stakes have been raised for tomorrow's meeting after Bloomberg News reported that the Governing Council is ready to downgrade its economic assessment. The reasons? Concerns over US-led trade wars, Brexit, and contagion from emerging markets, according to the report.

The entire EUR-complex has been knocked lower as a result, with speculation arising that this could be the first step taken in preparation for a change in the current preset policy course (ending QE in December 2018, raising rates by the end of "summer 2019."). See our full Euro forecast for the ECB meeting here.

EUR/USD Price Chart: Daily Timeframe (May to September 2018) (Chart 1)

DXY Index Sideways Grind Continues ahead of BOE, ECB Tomorrow

It stands to reason then that EUR/USD will be more active than GBP/USD tomorrow. But EUR/USD's chart is in no-man's land territory right now, with no viable strategy or pattern clearly discernible: in the middle of a potential range (if you squint), this isn't an ideal time for range traders; similarly, it's not a good time for breakout traders; and with price flat among its daily 8-, 13-, and 21-EMA envelope, it's not the time for momentum traders either. EUR/USD needs to clear 1.1510 to the downside or 1.1745 to the upside before a directional bias is appropriate once again.

DXY Index Price Chart: Daily Timeframe (January to September 2018) (Chart 2)

DXY Index Sideways Grind Continues ahead of BOE, ECB Tomorrow

It's of little surprise then that the DXY Index is facing similarly grinding conditions, given that the Euro is 57.6% of the DXY, The technical picture remains murky as price continues to flirt with a break below its daily 8-, 13-, and 21-EMA envelope. Momentum indicators are flat, with daily MACD hovering at the signal line and Slow Stochastics steadying themselves just below the median reading. Accordingly, the near-term technical outlook for the US Dollar remains 'neutral.'

Read more: DXY Index Slumps as GBP Advances on Brexit Deal Progress

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

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

Follow him on Twitter at @CVecchioFX

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

DISCLOSURES