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
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
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
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
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/7g9pB8D9xK
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/OCLzmXaDCu
  • Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/UZela9nSIm
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/7oqC3ykBbU
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/IgUIG55MbH
  • Supply constraints, rebounding global demand and rising inflation expectations may drive crude oil prices higher in the near term. Get your market update from @DanielGMoss here: https://t.co/ezPoAwcJt7 https://t.co/NMfk1cYSvE
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/OiRiBVeuzL
  • Crude Oil Prices Aiming Higher on OPEC Surprise, Inflation Expectations - https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/03/06/Crude-Oil-Prices-Aiming-Higher-on-OPEC-Surprise-Inflation-Expectations.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $CL #Crudeoil #OOTT #OPEC https://t.co/AKvXWX9DLQ
  • Given the size of the rally in the eleven months preceding the beginning of the current decline a broader sell-off looks warranted. Get your market update from @PaulRobinsonFX here: https://t.co/UxZiSulpwB https://t.co/raXvlzkGbV
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/lp0tmKS9WR
Euro Price Forecast: Stimulus Progress, Inflation Data to Buoy EUR/USD

Euro Price Forecast: Stimulus Progress, Inflation Data to Buoy EUR/USD

Daniel Moss, Analyst

Euro, EUR/USD, Fiscal Stimulus, Inflation, Federal Reserve, European Central Bank – Talking Points:

  • Equity markets slipped lower during APAC trade as climbing bond yields weighed on sentiment.
  • US fiscal stimulus progress and Fed Chair Powell’s congressional testimony will likely cap the Greenback’s potential upside.
  • EUR/USD looking to extend recent gains as price consolidates below key resistance.
Advertisement

Asia-Pacific Recap

Equity markets slipped lower during Asia-Pacific trade as the relentless climb in Treasury yields began to gnaw at market sentiment. Australia’s ASX 200 slid 0.19%, while Hong Kong’s Hang Seng Index dropped 0.48%. China’s CSI 300 plunged 2.57% after the local banking regulator tightened restrictions on fintech companies co-lending with commercial banks.

In FX markets, the cyclically-sensitive AUD, NZD, CAD and NOK largely outperformed while the haven-associated USD, JPY and CHF lost ground against their major counterparts. Copper surged to its highest levels in more than nine years on global growth optimism, and yields on US 10-year Treasuries surged to the highest levels since February of 2020.

Looking ahead, German business climate figures for February headline the economic docket alongside a speech from European Central Bank President Christine Lagarde.

Euro Price Forecast: Stimulus Progress, Inflation Data to Buoy EUR/USD

DailyFX Economic Calendar

Powell’s Congressional Testimony to Cap USD Upside

Federal Reserve Chair Jerome Powell’s semi-annual monetary policy testimony before Congress may ultimately cap the Greenback’s potential upside, and open the door for the Euro to extend its recent 1.5% rebound higher.

Powell is expected to reiterate the central bank’s commitment to supporting the economy by keeping interest rates at record lows and continuing to purchase at least $80 billion of Treasury securities and $40 billion of agency-mortgage-backed securities a month “until substantial progress has been made towards the Committee’s maximum employment and price stability goals”.

The chairman may also repeat his calls for more fiscal support to bolster the nation’s nascent recovery, given his previous statement that “it will require a society-wide commitment, with contribution from across government and the private sector” to restore the labour market to pre-pandemic levels.

Euro Price Forecast: Stimulus Progress, Inflation Data to Buoy EUR/USD

Further dovish rhetoric from the central bank head, combined with the impending deliver of a substantial fiscal support package, will likely keep the haven-associated US Dollar on the back foot. The House of Representatives is expected to put President Joe Biden’s proposed $1.9 trillion coronavirus-relief package to a vote on Friday.

On the European front, better-than-expected PMI figures out of Germany, and a marked rise in Euro-area inflation in January, may buoy the Euro against its lower-beta counterparts in the near-term. The Euro-area core inflation rate jumped to 1.4% in January, while headline inflation climbed to 0.9%.

This could convince the European Central Bank to hold fire on loosening its monetary policy settings further, despite several Governing Council members flagging the possibility of cutting interest rates further into negative territory.

Positive lfo survey figures out of Germany may also put a premium on the trading bloc’s currency, by suggesting that the region’s largest economy is weathering its recent lockdown better than originally expected.

Euro-Area Inflation Rate

Euro Price Forecast: Stimulus Progress, Inflation Data to Buoy EUR/USD

EUR/USD Daily Chart – Consolidating Above Key Range Support

From a technical perspective, the Euro looks set to extend its rebound higher against the US Dollar as price consolidates below Descending Channel resistance.

With the exchange rate tracking above all six moving averages, and the RSI nudging back above its neutral midpoint, the path of least resistance seems higher.

A daily close above the February high (1.2169) would likely neutralize near-term selling pressure and open the door for buyers to probe psychological resistance at 1.2200. Clearing that brings the yearly high set on January 6 (1.2349) into focus.

However, failing to breach Descending Channel resistance may allow sellers to drive the exchange rate back towards range support at 1.2055 – 1.2075.

Euro Price Forecast: Stimulus Progress, Inflation Data to Buoy EUR/USD

EUR/USD daily chart created using Tradingview

IG Client Sentiment Report

The IG Client Sentiment Report shows 42.31% of traders are net-long with the ratio of traders short to long at 1.36 to 1. The number of traders net-long is 14.71% higher than yesterday and 0.67% higher from last week, while the number of traders net-short is 0.82% higher than yesterday and 12.01% 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.

Euro Price Forecast: Stimulus Progress, Inflation Data to Buoy EUR/USD

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

Top Trading Lessons
Top Trading Lessons
Recommended by Daniel Moss
Top Trading Lessons
Get My Guide

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

DISCLOSURES