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
Bullish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • For those who like taking a look through memory lane, stocks (SPX) are heading to its historically worst patch in the year (Historical average based on 1990-2019 performance) https://t.co/RuhNxy6TYr
  • US futures tumble and European equities trade sharply lower: - S&P 500 (-0.34%) - Nasdaq 100 (-1.6%) - Dow Jones (-2.08%) - DAX (-2.86%)
  • $USDJPY plunging to its lowest levels since March as support at the July low (104.18) gives way. Daily close below the 104 level could bring the March 12 swing-low (103.08) into focus Is $USDJPY headed to parity? https://t.co/QtlWIPKbU6
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/7fMGgU3vUn
  • RT @MrMBrown: $GBP looks to be in for a rough ride this week - mounting speculation of tighter covid restrictions; Brexit trade talks remai…
  • 🇪🇸 Balance of Trade (JUL) Actual: €-0.31B Previous: €1.48B https://www.dailyfx.com/economic-calendar#2020-09-21
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.14%, while traders in NZD/USD are at opposite extremes with 72.33%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/pzRhq9H8WP
  • Heads Up:🇪🇸 Balance of Trade (JUL) due at 08:00 GMT (15min) Previous: €1.48B https://www.dailyfx.com/economic-calendar#2020-09-21
  • Hang Seng Index (HSI) fell over 1.8%. It is likely to end the day with a large bearish candlestick, which flags more downside risk. Breaking below 24,000 support will likely open the door for further losses with an eye at 23,780 - the 61.8% Fibonacci downward extension. https://t.co/mrYUt8dBvX
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Gold: 0.14% Silver: -0.30% Oil - US Crude: -1.24% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/XNHL75HNAY
Lackluster Euro-Zone GDP, CPI to Fuel EUR/USD Losses

Lackluster Euro-Zone GDP, CPI to Fuel EUR/USD Losses

2017-10-31 06:00:00
David Song, Strategist
Share:

- Euro-Zone Consumer Price Index (CPI) to Hold Steady at Annualized 1.5%.

- 3Q Gross Domestic Product (GDP) to Expand Another 2.3% Per Annum.

- New to Forex? Get started with this Free Beginners Guide

Trading the News: Euro-Zone Consumer Price Index (CPI)

DailyFX Calendar

EUR/USD stands at risk of extending the decline from the previous week as the 3Q Euro-Zone Gross Domestic Product (GDP) report is expected to show the economy growing another 2.3%, while the Consumer Price Index (CPI) is anticipated to hold steady at an annualized 1.5% for the third consecutive month in October.

A batch of lackluster data prints may do little to prop up the single-currency as President Mario Draghi & Co. plan to carry the quantitative easing (QE) program into 2018, and the euro-dollar exchange may face a more meaningful correction over the remainder of the year as the Governing Council remains in no rush to move away from its easing-cycle.

Interested in Watching the Market Reaction? Sign up & Join DailyFX Market Analyst Martin Essex LIVE to Cover the Euro-Zone GDP & CPI Reports!

However, a series of above-forecast prints may spark a bullish reaction in EUR/USD as it encourages the ECB to adopt an improved outlook for the monetary union. In turn, the central bank may continue change its tune over the coming months as ‘the strong cyclical momentum, as evidenced in recent developments in sentiment indicators, could lead to further positive growth surprises.

Impact that the Euro-Zone CPI report has had on EUR/USD during the previous release

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

SEP

2017

09/29/2017 09:00:00 GMT

1.6%

1.5%

+1

+12

September 2017 Euro-Zone Consumer Price Index (CPI)

EUR/USD 5-Minute Chart

EUR/USD Chart

The Euro-Zone Consumer Price Index (CPI) held steady at an annualized 1.5% for the second consecutive month in September, while the core rate of inflation unexpectedly narrowed to 1.1% from 1.2% during the same period. The preliminary reading showed energy prices slowing to 3.9% per annum from 4.0% in August, with the cost for services also narrowing to 1.5% from 1.6%, while prices for Food, Alcohol and Tobacco increased an annualized 1.9% after expanding 1.4% during the previous month. Nevertheless, the initial dip in EUR/USD was short-lived, with the pair climbing back above the 1.1800 handle to end the day at 1.1812.

How To Trade This Event Risk

Bearish EUR Trade: 3Q GDP & October CPI Hold Steady

  • Need a red, five-minute candle following the report to consider a short EUR/USD setup.
  • If market reaction favors a bearish Euro position, sell EUR/USD with two separate lots.
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to breakeven on remaining position once initial target is met, set reasonable limit.

Bullish EUR Trade: Euro-Zone Growth, Inflation Tops Market Forecast

  • Need a green, five-minute EUR/USD candle to consider a long Euro setup.
  • Carry out the same setup as the bearish Euro trade, just in reverse.

Potential Price Targets For The Release

EUR/USD Daily

EUR/USD Daily Chart

Download our EUR/USD quarterly projections in our FREE DailyFX Trading Forecasts

  • Downside targets remain on the radar for EUR/USD as a head-and-shoulders formation unfolds, with the both price & the Relative Strength Index (RSI) still preserving the bearish trends carried over from the summer months.
  • With the near-term outlook capped by the 1.1860 (161.8% expansion) region, a break/close below the 1.1580 (100% expansion) hurdle raises the risk for a move back towards 1.1480 (78.6% expansion) to 1.1500 (78.6% expansion) followed by the Fibonacci overlap around 1.1390 (61.8% retracement) to 1.1400 (61.8% expansion).
  • However, the pair may stage a more meaningful rebound from channel supports as the RSI struggles to push into oversold territory, with the first hurdle coming in around 1.1670 (50% retracement).
  • Interim Resistance: 1.2320 (23.6% retracement) to 1.2370 (61.8% expansion)
  • Interim Support: 1.1390 (61.8% retracement) to 1.1400 (61.8% expansion)

EUR/USD Retail Sentiment

EUR/USD Retail Sentiment

Click Here to Learn How Shifts in Retail Position/Sentiment Impact Trend!

Retail trader data shows 40.8% of traders are net-long EUR/USD with the ratio of traders short to long at 1.45 to 1.

The number of traders net-long is 2.9% lower than yesterday and 0.6% higher from last week, while the number of traders net-short is 9.3% higher than yesterday and 0.3% 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. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EUR/USD trading bias.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link

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

DISCLOSURES