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
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
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
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
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • US Dollar Price Action Setups: EUR/USD, AUD/USD, GBP/USD https://www.dailyfx.com/forex/video/live_events/2020/10/20/US-Dollar-Price-Action-Setups-EURUSD-EUR-USD-AUD-USD-AUDUSD-GBP-USD-GBPUSD.html https://t.co/zzMSzNAu7E
  • Renewed hopes of additional US stimulus combined with economic uncertainty increased the demand for Gold, Silver and other safe-haven assets temporarily. Get your market update from @Tams707 here:https://t.co/tdpnGJAdZp https://t.co/d3DlqqcAde
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 1.83% Gold: 0.39% Oil - US Crude: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/V9jnip9o7w
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.81%, while traders in EUR/USD are at opposite extremes with 72.76%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/AqbJxwy3OI
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 1.08% Wall Street: 0.93% Germany 30: 0.13% FTSE 100: 0.10% France 40: 0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/YdA0uOcvxT
  • Overnight, RBA’s Kent had reiterated the message by the RBA Governor last week, that more monetary easing is on its way. Get your $AUDUSD market update from @JMcQueenFX here:https://t.co/Jq1ejeUf4Q https://t.co/16nQEIwC9i
  • webinar time... https://www.dailyfx.com/webinars/455809179 topics up for discussion today: 1) USD - do something 2) Stocks supported on stimulus hopes 3) Crosses cleaning up a bit? starting right meow https://www.dailyfx.com/webinars/455809179 https://t.co/zj9XN14BDv
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.82%, while traders in EUR/USD are at opposite extremes with 72.47%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/qMPdBfUArS
  • Heads Up:🇺🇸 Fed Evans Speech due at 17:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-20
  • House Speaker Nancy Pelosi: -Optimistic for stimulus deal -Trump administration has come a long way toward reaching an agreement -Want to crush the virus -Need to improve health care language on stimulus bill -Will speak with Treasury Secretary Steven Mnuchin today at 3PM ET
Euro Relief Rally Dampened By ECB, Sterling At Risk Amid More QE

Euro Relief Rally Dampened By ECB, Sterling At Risk Amid More QE

2012-06-29 13:40:00
David Song, Strategist
Share:

Talking Points

  • Euro: EU Strikes Deal On ESM, Spanish Bailout – ECB To Ease Policy Further
  • British Pound: Struggles To Clear 61.8% Fib, BoE To Conduct More QE
  • U.S. Dollar: Weighed By Risk-Appetite, NFP’s To Increase Another 90K

Euro: EU Strikes Deal On ESM, Spanish Bailout – ECB To Ease Policy Further

The Euro surged to a high of 1.2692 as the EU agreed to directly recapitalized commercial banks through the European Stability Mechanism, while the group said it would drop the senior loan status for Spain as the government looks to tap up to EUR 100B from the ESM. However, we saw German Chancellor Angela Merkel hold her ground as she continued to reject Euro bonds, and went onto say that easing borrowing condition for Spain’s is a special one-time case – curbing speculation that Italy may get a similar deal should it require assistance.

Indeed, the move has helped to alleviate the short-term strains in the European financial system, but it seems as though the group is making another attempt to buy more time as the deal does little to lift the fundamental outlook for the region. As a result, we may see the single currency come under pressure next week as market participants see the European Central Bank taking additional steps to shore up the ailing economy, and we may see the Governing Council carry out its easing cycle throughout the second-half of the year as growth and inflation tapers off. Although 45 of the 57 economists polled by Bloomberg News are calling for lower borrowing costs next week, market participants are pricing a 37% chance for a 25bp rate cut according to Credit Suisse overnight index swaps, and the shift in the policy outlook may dampen the appeal of the single currency as the central bank tries to stem the risk for a prolonged recession. As the EURUSD carves out a lower high around 1.2745, we should see the downward trending channel from 2011 continue to take shape, and we may see the pair give back the relief rally should the ECB continue to strike a dovish tone for monetary policy.

British Pound: Struggles To Clear 61.8% Fib, BoE To Conduct More QE

The British Pound advanced to an overnight high of 1.5697 amid the rise in risk-taking behavior, but the sterling may come under pressure next week as market participants see the Bank of England taking additional steps to shield the U.K. economy from the debt crisis. According to a survey by Bloomberg News, 38 of the 40 economists polled see the central bank expanding its asset purchase program beyond the GBP 325B target, but we may see the majority of the Monetary Policy Committee stick to its current policy in July as the stickiness in underlying price growth raises the threat for inflation. As the GBPUSD struggles to push back above the 61.8% Fibonacci retracement from the 2009 low to high around 1.5690-1.5700, we may see the exchange rate consolidate ahead of the rate decision, but the pair may fall back towards 50.0% Fib around 1.5270 should the BoE take a very aggressive approach in curbing the downside risks for the region.

U.S. Dollar: Weighed By Risk-Appetite, NFP’s To Increase Another 90K

The greenback gave back the advance from earlier this month, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) tagging a low of 10,048, and the reserve currency may trade heavy throughout the North American trade as FX traders increase their appetite for risk. Nevertheless, as we’re expecting to see U.S. Non-Farm Payrolls increase another 90K in June, the tepid recovery in the labor market may renew speculation for another large-scale asset purchase program, but it seems as though the FOMC is moving away from quantitative easing as the committee extends ‘Operation Twist.’ In turn, we will maintain our medium-term call for the USD, and we should see the upward trend continue to take shape as the Fed softens its dovish tone for monetary policy.

--- 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 Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

13:45

09:45

Chicago Purchasing Manager (JUN)

52.3

52.7

USD

13:55

09:55

U. of Michigan Confidence (JUN F)

74.1

74.1

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

DISCLOSURES