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
Bullish
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
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZX8cS https://t.co/qdrsi61CN8
  • It seems the markets are riding high, but risk is always lurking around the corner. Consider your escape plan before you find yourself in collapsing market. What are the top havens for different conditions in 2021? Find out from @JohnKicklighter here: https://t.co/1oeXWEsJkb https://t.co/IyQdfq29fz
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here: https://t.co/EDvQdHfIPm https://t.co/R7pa7DsM8n
  • What are some monetary policies that could affect Gold this quarter? Get your Gold free forecast here: https://t.co/bTXkGN1CIM #DailyFXGuides https://t.co/EhdZpmkzaH
  • Even more remarkable than the record high levels of leverage registered in US equities this past week was the attention it garnered. Paying attention to risk is a threat when markets are this high and the docket as dense as it is this week. My outlook: https://www.dailyfx.com/forex/video/daily_news_report/2021/01/23/Dow-VIX-Tesla-and-Leverage-Reflect-Greater-Risk-to-the-Relentless-Bull-Market.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/KBOJIRPTQe
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/qP2PbS4dsY
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here: https://t.co/qV3c7a4YR3 https://t.co/POGWDIkqqz
  • USD hegemony is at risk thanks to changes in the global economy and the long-term consequences of the US-China trade war. Get your market update from @CVecchioFX here: https://t.co/5GO9UrvO4y https://t.co/H76jNJJxU5
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/1TiEWCbJ6t
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/fN2mfHgpON
Forex: Euro Weighed By Bets For ECB Rate Cut- Further Losses Ahead

Forex: Euro Weighed By Bets For ECB Rate Cut- Further Losses Ahead

David Song, Strategist

Talking Points

  • Euro: ECB Lowers Inflation Forecast, Discusses Rate Cut
  • British Pound: BoE Maintains Current Policy, All Eyes On Meeting Minutes
  • U.S. Dollar: Struggles Ahead Of NFPs- Job Growth To Slow

Euro: ECB Lowers Inflation Forecast, Discusses Rate Cut

The Euro weakened to 1.3024 as there was a wide discussion for a rate cut at the European Central Bank’s (ECB) December meeting, and it seems as though the Governing Council will continue to embark on its easing cycle in the following year as the deepening recession threatens price stability.

Although the Governing Council kept the benchmark interest rate a 0.75%, the central bank lowered its 2013 inflation to 0.6% - 2.2% amid the weakening outlook for growth, and we may see a growing number of ECB officials show a greater willingness to push the benchmark interest rate to a fresh record-low as the debt crisis continues to drag on the real economy.

Indeed, President Draghi tried to shift the burden onto the EU and put greater emphasis in take the appropriate steps to improve public finances, but it seems as though the ECB will have little choice but to expand monetary policy further as the governments operating under the single currency become increasingly reliant on external support.

As the relative strength index on the EURUSD continues to come off of overbought territory, the pullback from 1.3125 should gather pace going into the end of the year, and we will maintain a bearish forecast for the Euro as the fundamental outlook for the region turns increasingly bleak. In turn, we may see the euro-dollar establish a downtrend going into 2013, and we will look for another run at the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2640-50 as the ECB turns increasingly dovish.

British Pound: BoE Maintains Current Policy, All Eyes On Meeting Minutes

The British Pound regained its footing on Thursday, with the GBPUSD advancing to a high of 1.6127, but the sterling may face range-bound prices ahead of the Bank of England (BoE) Minutes due out on December 19 as market participants weigh the outlook for monetary policy.

Indeed, the BoE refrained from releasing a policy statement as the central bank kept the benchmark interest rate at 0.50% while maintaining its asset purchase program at GBP 375B, but the policy statement may show the Monetary Policy Committee (MPC) slowly moving away from its easing cycle as inflation stubbornly holds above the 2% target. As the U.K. emerges from the double-dip recession, sticky price growth may encourage the BoE to switch gears in 2013, and the central bank may sound more hawkish going into the following year as the region gets on a more sustainable path.

As the BoE carries its wait-and-see approach into the New Year, we’re seeing the relative strength index on the GBPUSD preserve the upward trend carried over from previous month, and the pair looks poised to make another run at the 23.6% Fibonacci retracement from the 2009 low to high around 1.62000 as market participants scale back expectations for additional monetary support.

U.S. Dollar: Struggles Ahead Of NFPs- Job Growth To Slow

The greenback gave back the rebound from the previous day, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) slipping to a low of 9,937, and the reserve currency may continue to consolidate ahead of the highly anticipated Non-Farm Payrolls report as job growth is expected to slow in November.

Employment in the world’s largest economy is expected to increase another 86K after expanding 171K in October, and the protracted recovery in the labor market may fuel speculation for additional monetary support as the Fed keeps the door open to expand its balance sheet further.

However, as the Fed takes note of the more broad-based recovery, the resilience in private sector consumption along with the budding recovery in the housing market may keep the FOMC on the sidelines, and we may see the committee carry its current policy into the following year as the outlook for growth and inflation picks up.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

CAD

15:00

10:00

Ivey Purchasing Managers Index s.a. (NOV)

58.3

CAD

15:30

10:30

Bank of Canada Releases Financial System Review

USD

17:00

12:00

Household Change in Net Worth (3Q)

-$322B

AUD

22:30

17:30

AiG Performance of Construction Index (NOV)

35.8

--- 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

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

DISCLOSURES