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
Bullish
GBP/USD
Bullish
USD/JPY
Bearish
Gold
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
Bitcoin
Bullish
More View more
Real Time News
  • The Japanese #Yen may rise as the #SP500 outlook risks shifting more bearish on signals in trader positioning. What is the road ahead for $USDJPY given the outbreak of the #coronavirus? - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/02/26/Yen-Outlook-Bullish-USDJPY-May-Fall-as-SP-500-Sees-Dip-Buying.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/ynFwtuzd6P
  • That's more or less a 268% increase after the government announced expansionary measures such as giving HK$10k to each adult permanent resident... https://t.co/kIM4QNkHuw
  • Hong Kong 2019/20 fiscal deficit at HK$37.9b, 2020/21 deficit at a record HK$139.1b -BBG
  • If you missed this week's session on IG Client Sentiment where I discussed the Japanese Yen and #SP500 outlook, check out the recording on YouTube here $USDJPY $AUDJPY #SPX - https://t.co/6VYWaVuJgZ
  • - Copper price outlook gloomy as #COVID-19 intimidates Chinese demand - Coronavirus threatens to derail global stabilization, pressure commodity - Copper futures have plunged over 10 percent, falling to 17-year uptrend https://www.dailyfx.com/forex/market_alert/2020/02/26/Copper-Outlook-Bleak-as-COVID-19-Threatens-China-Economy.html
  • The $JPY has lost out to a broadly resurgent US Dollar, with a clearly dwindling band of Yen bulls left to hope that the most recent rise has become overextended. Get your market update from @DavidCottleFX here:https://t.co/7Ndm5jiOi7 https://t.co/iXFakOQKJB
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.90% Silver: 0.38% Gold: 0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/CwYU17wruT
  • RT @DavidInglesTV: U.S. weekly imports from China fell by half last week and early indications is this week will be about half of last week…
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.02% 🇦🇺AUD: -0.01% 🇳🇿NZD: -0.06% 🇪🇺EUR: -0.12% 🇨🇭CHF: -0.13% 🇯🇵JPY: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/V5JsKlfFcF
  • Hong Kong 2020 GDP forecast -1.5% to +0.5% -BBG
Forex: Euro At Risk Ahead Of EU Summit, Sterling To Consolidate

Forex: Euro At Risk Ahead Of EU Summit, Sterling To Consolidate

2011-12-05 15:00:00
David Song, Currency Strategist
Share:

Talking Points

  • Euro: German, France Push For ‘New Treaty - Italy To Vote On EUR 30B Relief Package
  • British Pound: U.K. Services Pick Up, BoE to Maintain Current Policy
  • U.S. Dollar: Weakens Across The Board, ISM Non-Manufacturing On Tap

Euro: German, France Push For ‘New Treaty - Italy To Vote On EUR 30B Relief Package

The Euro advanced to 1.3485 as German Chancellor Angela Merkel and French President Nicolas Sarkozy pushed for a ‘new treaty,’ while Italian Prime Minister Mario Monti unveiled a EUR 30B package to boost growth while cutting the budget deficit. As Italy’s government is scheduled to vote on the new measures later today, a positive outcome should help the EUR/USD to retrace the selloff from Friday, but the relief rally may be short-lived as the European Central Bank maintains a cautious outlook for the region.

Indeed, the ECB is widely expected to lower the benchmark interest rate by another 25bp a head of the EU Summit, and we may see the central bank continue to move away from its nonstandard measure as its asset purchase program comes under increased scrutiny. In turn, policy makers in Europe may show an increased willingness to channel funds through the International Monetary Fund, financed by the central banks operating under the monetary union, but we may see investor confidence deteriorate further should the EU struggle to meet on common ground at the Summit scheduled for later this week. As the EUR/USD struggles to hold above the 20-Day SMA at 1.3482, we should see the downward trending channel continue to pan out in the days ahead, and the exchange rate may make another run at the 38.2% Fibonacci retracement from the 2009 high to the 2010 low around 1.3100 should optimism surrounding the EU Summit deteriorate in the days ahead.

British Pound: U.K. Services Pick Up, BoE to Maintain Current Policy

The British Pound advanced to 1.5686 following the rise in market sentiment, and the sterling may continue to retrace the sharp decline from the previous month as the fundamental outlook for Britain improves. As service-based activity in the U.K. expands at a faster pace, the Bank of England may soften its dovish outlook for the region, and the central bank may preserve its wait-and-see approach in the beginning of the following year as policy makers expect to see a modest recovery in 2012. In turn, market participants may show a muted reaction to the BoE rate decision on tap for later this week, and we may see the GBP/USD consolidate over the near-term as market participants wait for the meeting minutes, which are due out on December 21. As market participants increase their appetite for risk, we may see the GBP/USD climb back above the 38.2% Fib from the 2009 low to high around 1.5680-1.5700, but the rebound could be short-lived should we see the 20-Day SMA (1.5725) hold up as resistance.

U.S. Dollar: Weakens Across The Board, ISM Non-Manufacturing On Tap

The greenback weakened against all of its major counterparts on Monday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) slipping to a low of 9,854, and the rise in risk sentiment may gather pace during the North American trade as equity futures foreshadow a higher open for the U.S. market. At the same time, we’re expecting service-based activity in the world’s largest economy to expand at a faster pace in November, and a rise in the ISM Non-Manufacturing index may dampen the appeal of the USD as market participants continue to treat the reserve currency as a safe haven. As risk sentiment picks up ahead of the EU Summit, the greenback may struggled to hold its ground over the coming days, but hopes surrounding the meeting could be short-lived should European policy makers fail to meet eye-to-eye.

--- 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, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Retrace The Advance From Earlier This Year? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

14:00

10:00

ISM Non-Manufacutring Composite (NOV)

53.5

52.9

USD

14:00

10:00

Factory Orders (OCT)

-0.3%

0.3%

Currency

GMT

Release

Expected

Actual

Comments

NZD

20:45

Value of All Buildings s.a. (3Q)

--

-2.3%

Falls for three straight quarters.

AUD

21:30

AiG Performance of Service Index (NOV)

--

47.7

Contracts for the eighth time this year.

AUD

22:30

TD Securities Inflation (MoM) (NOV)

--

-0.1%

Weakens for the second time in 2011.

AUD

22:30

TD Securities Inflation (YoY) (NOV)

--

2.1%

JPY

22:50

Loans & Discounts Corp (YoY) (OCT)

--

-0.8%

Declines for 24 straight months.

AUD

23:30

Company Operating Profit (QoQ) (3Q)

3.0%

4.8%

Increases for the second quarter.

AUD

23:30

Inventories (3Q)

1.2%

-1.1%

Falls for the first time since 3Q 2010.

AUD

23:30

ANZ Job Advertisements (MoM) (NOV)

--

0.0%

Fails to grow for the seventh time this year.

CNY

1:30

HSBC PMI Services (NOV)

--

52.5

Slowest pace of growth since August.

EUR

7:45

Italian PMI Services (NOV)

44.1

45.8

Contracts for the third consecutive month.

EUR

7:50

French PMI Services (NOV F)

49.3

49.6

EUR

7:55

German PMI Services (NOV F)

51.4

50.3

EUR

8:00

Euro-Zone PMI Services (NOV F)

47.8

47.5

EUR

8:00

Euro-Zone PMI Composite (NOV F)

47.2

47.0

EUR

8:30

Euro-Zone Sentix Investor Confidence (DEC)

-21.0

-24.0

Lowest reading since July 2009.

GBP

8:30

Purchasing Manager Index Services (NOV)

50.5

52.1

Fastest pace of growth since September.

GBP

8:30

Official Reserves (Changes) (NOV)

--

-$249M

Declines for the fifth time this year.

EUR

9:00

Euro-Zone Retail Sales (MoM) (OCT)

0.1%

0.4%

Increases for the seventh time in 2011.

EUR

9:00

Euro-Zone Retail Sales (YoY) (OCT)

-0.8%

-0.4%

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

DISCLOSURES

News & Analysis at your fingertips.