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
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Germany 30: -0.86% FTSE 100: -1.20% France 40: -1.27% Wall Street: -2.32% US 500: -2.53% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/KjNr7ongtX
  • Nasdaq now down over 3% today, confirming 10% correction territory. $QQQ
  • $USDCHF has continued to strength today, now above the 0.9280 level, trading around the highs hit in late September. The pair has performed strongly since mid February as US rates have continued higher, rising from 0.8900 by nearly 400 pips to its current levels. $USD $CHF https://t.co/qrHY8Sy2sf
  • Against the backdrop of rising bond yields, both the Bank of England and European Central Bank will meet over the next two weeks. Get your market update from @CVecchioFX here:https://t.co/bcdEfLJjJ7 https://t.co/vXmdohw4VK
  • Oil - US Crude IG Client Sentiment: Our data shows traders are now at their least net-long Oil - US Crude since Jan 06 when Oil - US Crude traded near 5,008.80. A contrarian view of crowd sentiment points to Oil - US Crude strength. https://www.dailyfx.com/sentiment https://t.co/5dv539nKye
  • US Indices are struggling again today. The Nasdaq is now down 10% from the record highs of mid February, entering correction territory. The $VIX has risen to its highest level since last week's bond market event. DOW -1.31% NDX -2.37% SPX -1.48% RUT -2.68% $DIA $QQQ $SPY $IWM https://t.co/VKbWrCcymL
  • #Bitcoin battle-lines drawn. . . Updated 240min $BTCUSD https://t.co/epcJWYYoQh https://t.co/duPBPAM0Ps
  • Overall, Powell sticks with the current Fed stance and hence the move with the USD and UST yields higher, while gold tests 1700 https://t.co/78ds2uS2i9
  • #Gold is hitting fresh nine-month low in the aftermath of Fed Chair Powell's speech, falling to currently trade right around $1,700 for the first time since June of 2020. $XAU $GLD https://t.co/6OJ5Fn4Kn8
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.38%, while traders in Germany 30 are at opposite extremes with 70.84%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Lgws7z82Gc
Euro Rate Forecast: Retracing Gains Ahead of ECB Meeting - Levels for EUR/USD, EUR/JPY Rates

Euro Rate Forecast: Retracing Gains Ahead of ECB Meeting - Levels for EUR/USD, EUR/JPY Rates

Christopher Vecchio, CFA, Senior Strategist
Advertisement

Euro Forecast Overview:

  • The Euro continues to give back some of its recent rally, but key technical levels suggesting that the bullish breakout attempts have failed have not been triggered.
  • Both EUR/JPY and EUR/USD rates have seen topside wicks develop over the past several daily candlesticks, suggesting that overhead supply is keeping gains in check ahead of the December ECB meeting.
  • Per the IG Client Sentiment Index, the Euro has a mixed if not bearish bias in the short-term.

Euro Treading Water Between Brexit and ECB

After an explosive first week of December, the Euro finds itself treading water and giving back gains at a modest clip midway through the second week of the month. That’s not to say that sellers have control; indeed, all of the major EUR-crosses are still above their daily 5-EMA, an indication of strong bullish momentum in the short-term.

Instead, traders have taken a more cautious approach following the Euro’s breakout attempts, as the specter of a ‘no deal, hard Brexit’ has crept back into the picture, while the December European Central Bank rate decision brings forth the prospect of some effort to try and cap the Euro gains (if not directly, indirectly vis-à-vis enhanced monetary policy operations). That said, these may be short-term concerns provoking the churn in EUR-crosses. Consistent with our Monday Euro forecast update, the pause in the Euro rally doesn’t necessarily mean that the bullish outlook has been negated.

Read more: FX Week Ahead: December ECB Rate Decision & EUR/USD Rate Forecast

EUR Forecast
EUR Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free EUR Forecast
Get My Guide

EUR/USD RATE TECHNICAL ANALYSIS: DAILY CHART (December 2019 to December 2020) (CHART 1)

eur/usd rate forecast, eur/usd technical analysis, eur/usd rate chart, eur/usd chart, eur/usd rate, euro forecast, euro rate, euro rate forecast, euro to dollar

EUR/USD rates have followed up Monday’s candle – not quite a doji, not quite a bearish engulfing bar – with modest weakness. The hammer candle on Tuesday proved to be an inside day, and price action has seen another long wick form on the topside thus far today. This may simply be the digestion phase of a pair that has recently experienced a bullish breakout above sideways range resistance in place since late-June. It still holds that final targets for a simple doubling of the broader range dating back to late-June would suggest gains through 1.2600 in the coming months.

Amid several weeks of EUR/USD rates maintaining their elevation above the downtrend from the 2008 and 2014 highs (from the all-time high), the short-term weakness does little to change the longer-term bullish outlook. EUR/USD rates are holding their daily 5-, 8-, 13-, and 21-EMA envelope, which is in bullish sequential order. Daily MACD is still trending higher above its signal line, while Slow Stochastics are pulling back but still remain in overbought territory.

Building Confidence in Trading
Building Confidence in Trading
Recommended by Christopher Vecchio, CFA
Building Confidence in Trading
Get My Guide

IG Client Sentiment Index: EUR/USD Rate Forecast (December 9, 2020) (Chart 2)

igcs, ig client sentiment index, igcs eur/usd, eur/usd rate chart, eur/usd rate forecast, eur/usd technical analysis

EUR/USD: Retail trader data shows 31.85% of traders are net-long with the ratio of traders short to long at 2.14 to 1. The number of traders net-long is 3.73% higher than yesterday and 25.93% higher from last week, while the number of traders net-short is 2.11% lower than yesterday and 10.83% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise.

Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse lower despite the fact traders remain net-short.

EUR/JPY RATE TECHNICAL ANALYSIS: DAILY CHART (December 2019 to December 2020) (CHART 3)

eur/jpy rate forecast, eur/jpy technical analysis, eur/jpy rate chart, eur/jpy chart, eur/jpy rate, euro forecast, euro rate, euro rate forecast, euro to yen, eur to jpy

EUR/JPY rates, like their EUR/USD counterpart, have experienced light selling pressure in recent days as evidenced by the long wicks formed on the daily candles, indicative of sellers taking control by the end of the session. But momentum indicators remain bullish. EUR/JPY rates are still above the daily 5-, 8-, 13-, and 21-EMA envelope, which is in bullish sequential order. Daily MACD is trending higherabove its signal line, while Slow Stochastics are holding in overbought condition.

Despite near-term churn, EUR/JPY rates are holding near their highest level since early-September, having stalled just below the 38.2% Fibonacci retracement of the 2016 low/2018 high range at 126.70. Furthermore, EUR/JPY rates have found resistance at the ascending trendline from the July 2012 and June 2016 lows, a trendline that has been tested multiple times the past year. As a result, a bullish breakout to fresh yearly highs above 127.08 would be a material accomplishment – and one that can’t be dismissed, particularly if the ECB fails in its efforts to restrain the Euro on Thursday.

Forex for Beginners
Forex for Beginners
Recommended by Christopher Vecchio, CFA
Forex for Beginners
Get My Guide

IG Client Sentiment Index: EUR/JPY Rate Forecast (December 9, 2020) (Chart 4)

igcs, ig client sentiment index, igcs eur/jpy, eur/jpy rate chart, eur/jpy rate forecast, eur/jpy technical analysis

EUR/JPY: Retail trader data shows 29.91% of traders are net-long with the ratio of traders short to long at 2.34 to 1. The number of traders net-long is 7.66% higher than yesterday and unchanged from last week, while the number of traders net-short is 12.92% lower than yesterday and 34.16% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/JPY prices may continue to rise.

Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EUR/JPY trading bias.

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

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

DISCLOSURES