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. See our updated Privacy Policy here.

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
Oil - US Crude
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
  • EUR/USD tumbled last week on the day of the ECB’s latest policy announcement, and that weakness is set to continue this week as a flood of major Eurozone economic statistics is released. Get your weekly Euro forecast from @MartinSEssex here: https://t.co/9B4rJnzWuz https://t.co/ENF3xlkuyP
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqi8ZEe https://t.co/Gps2Xp32h9
  • 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/hftCEho1lM
  • Gold price action is primed for volatility next week with the Fed decision on deck. How real yields and the US Dollar react to fresh guidance from Fed officials will be key for gold outlook. Get your weekly gold forecast from @RichDvorakFX here: https://t.co/MzaIl7tPmZ
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/rFlQtyQS81
  • Canadian Dollar snapped a three-week losing streak after USD/CAD stalled at key technical resistance. Get your CAD weekly forecast from @MBForex here: https://t.co/BPHuKecwnz https://t.co/73OmuCKfU9
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/KzhQnGiLyt
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/cuneuJNZlH
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/danCiP5vqK
  • 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/JhYoQ7I19K
Euro Struggles Amid Deepening Recession- ECB to Buy More Time

Euro Struggles Amid Deepening Recession- ECB to Buy More Time

David Song, Strategist

Talking Points

  • Euro: Retail Sales Weakens Further, ECB Can Only Buy Time
  • British Pound: BoE to Maintain Current Policy, 38.2% Fib in Sight
  • U.S. Dollar: Index Back Above 10,500- ECB Rhetoric on Tap

Euro: Retail Sales Weakens Further, ECB Can Only Buy Time

The Euro pared the overnight advance to 1.3139 as service-based activity in Europe contracted for the fifteenth month in April, while retail spending contracted another 0.1% in March after falling a revised 0.2% the month prior.

As the EU warns of a deepening recession in the euro-area, European Central Bank board member Benoit Coeure said the Governing Council will reduce the benchmark interest rate ‘again if indicators confirm the situation is deteriorating,’ and went onto say that the region needs ‘a strategy for returning to growth’ as the governments operating under the single currency become increasingly reliant on monetary support.

However, as European officials scale back their push for austerity, German Finance Minister Wolfgang Schaeuble warned the unprecedented measures taken by the ECB can ‘only buy time,’ and we may see a growing rift within the monetary union as the periphery countries struggling to get their house in order.

Nevertheless, it seems as though negative interest rates will be a growing discussion at the ECB as the economic downturn threatens price stability, and we anticipate the Governing Council to carry out its easing cycle throughout 2013 as the fundamental outlook for the region continues to deteriorate.

As the EURUSD struggles to hold above the 38.2% Fibonacci retracement from the 2009 high to the 2010 low around 1.3120, the near-term correction in the exchange rate could be nearing an end, and negative headlines coming out of the euro-area may continue to dampen the appeal of the single currency as European officials maintain a reactionary approach in addressing the risks surrounding the region.

British Pound: BoE to Maintain Current Policy, 38.2% Fib in Sight

The British Pound lost ground on Monday, with the GBPUSD tagging a low of 1.5548, but we may see the GBPUSD hold steady ahead of the Bank of England (BoE) interest rate decision as the central bank is widely expected to preserve its wait-and-see approach this month.

Indeed, the BoE remains poised to keep the benchmark interest rate at 0.50% while maintaining its asset purchase program at GBP 375B, and we may see another 6-3 split within the Monetary Policy Committee as the U.K. is expected to face above-target inflation over the policy horizon. At the same time, the majority may present a greater case to retain a neutral policy stance in the coming months, and we may see a growing number of BoE officials start to discuss an exit strategy in the second-half of the year as the Funding for Lending Scheme continues to work its way through the real economy.

As the GBPUSD maintains the upward trending channel dating back to March, the pair may continue to work its way towards the 38.2% retracement from the 2009 low to high around 1.5680, and the bullish sentiment surrounding the sterling may gather pace over the near to medium-term as the BoE appears to be slowly moving away from its easing cycle.

U.S. Dollar: Index Back Above 10,500- ECB Rhetoric on Tap

The greenback extended the rebound from the previous week, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)climbing to a high of 10,508, and the greenback may continue to track higher during the North American trade should we see the flight the safety gather pace.

Although the economic docket remains fairly light over the next 24-hours of trading, ECB President Mario Draghi is scheduled to speak at 9:00 ET, and the fresh batch of central bank rhetoric may increase the appeal of the USD amid the deviation in the policy outlook.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

CAD

14:30

10:30

Ivey Purchasing Managers Index s.a. (APR)

58.0

61.6

NZD

22:00

18:00

ANZ Truckometer Heavy Traffic (APR)

-2.7%

NZD

22:45

18:45

Average Hourly Earnings (QoQ) (1Q)

1.0%

-0.4%

NZD

22:45

18:45

Private Wages Exc Overtime (QoQ) (1Q)

0.5%

0.5%

NZD

22:45

18:45

Private Wages Inc Overtime (QoQ) (1Q)

0.5%

0.6%

--- 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

Trading the volatile hours of the US open? Use this app to help find breakouts during these market conditions.

RelatedArticles: Weekly Currency Trading Forecast

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

DISCLOSURES