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
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
GBP/USD
Bearish
USD/JPY
Bearish
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • The Australian Dollar and New Zealand Dollar tend to rise with stocks. They have recently fallen despite gains in the #SP500. What does this mean for $AUDUSD and $NZDUSD ahead? #AUD #NZD #RBA #RBNZ - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/17/AUDUSD-NZDUSD-Outlook-Looks-Past-Stocks-to-Rate-Cut-Bets.html?CHID=9&QPID=917702 https://t.co/ddf2fV7Kyl
  • A few snippets from today's commentary. Check out the link below for the full story (via @DailyFX). https://t.co/I31tuq764r https://t.co/x0BaiOFA1P
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/e2YrN3dBrl
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.00%, while traders in France 40 are at opposite extremes with 79.59%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/UL7hqSD2Ki
  • US Dollar Forecast: $USD Lacking Impetus Ahead of Consumer Sentiment #Forex traders shift focus away from US-China trade deal headlines - perhaps toward the monthly release of #ConsumerSentiment data for volatility and clues on the Greenback's next move https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2020/01/16/us-dollar-forecast-usd-lacking-impetus-ahead-of-consumer-sentiment.html
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.11% 🇦🇺AUD: -0.02% 🇯🇵JPY: -0.03% 🇨🇭CHF: -0.05% 🇬🇧GBP: -0.06% 🇨🇦CAD: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Kxcb9EtIWb
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.45% France 40: 0.26% Wall Street: 0.07% US 500: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/I5YIsKQAog
  • 🇯🇵 JPY Tertiary Industry Index (MoM) (NOV), Actual: 1.3% Expected: 1.0% Previous: -5.2% https://www.dailyfx.com/economic-calendar#2020-01-17
  • The $JPY has weakened as a bounce-back in risk appetite saps haven-asset demand. However, the old uptrend line still provides clear resistance. Get your market update from @DavidCottleFX HERE:https://t.co/IMhgQ9jbF9 https://t.co/I7087olftk
  • Heads Up:🇯🇵 JPY Tertiary Industry Index (MoM) (NOV) due at 04:30 GMT (15min), Actual: N/A Expected: 1.0% Previous: -4.6% https://www.dailyfx.com/economic-calendar#2020-01-17
Euro Ambitions to Revive Bull Trend May Be Dashed by Dollar, Crisis Fears

Euro Ambitions to Revive Bull Trend May Be Dashed by Dollar, Crisis Fears

2012-03-23 23:21:00
John Kicklighter, Chief Currency Strategist
Share:
Euro_Ambitions_to_Revive_Bull_Trend_May_Be_Dashed_by_Dollar_Crisis_Fears_body_Picture_5.png, Euro Ambitions to Revive Bull Trend May Be Dashed by Dollar, Crisis FearsEuro_Ambitions_to_Revive_Bull_Trend_May_Be_Dashed_by_Dollar_Crisis_Fears_body_Picture_6.png, Euro Ambitions to Revive Bull Trend May Be Dashed by Dollar, Crisis Fears

Fundamental Forecast for the Euro: Bearish

Congestion was the name of the game last week for EURUSD, and that makes sense when we look at the fundamental backdrop for the pair as well as the weight of the technical levels currently restricting its movements. With the boundary of the larger bear trend holding above (1.3300/3500), there is a higher threshold for generating follow through – something more convincing than a rebound founded on a deferred resolution on the region’s persistent financial troubles and growth-inhibiting austerity drive. There are two fundamental themes euro traders should watch going forward: risk appetite trends and headlines regarding the financial health.

Of these two themes, one can work for or against the euro; but the other really holds potential shock value only for the bears. Over the past few years, concerns surrounding the Euro Zone’s ability to balance its member requirements for trim deficits with healthy growth have replaced the calls to further diversify away from the dollar and into this second most liquid currency. Having crested the most recent swell in the ongoing struggle with Greece’s immediate funding needs met, there is naturally a ‘collapse’ premium that will naturally be worked off. However, the rebound for this particular phase threatens to be more reserved. First of all, this is yet another round in a long series of do-or-die situations. Investors are less susceptible to turn optimistic after so many false starts. In turn, it is easier to spot the next swell as the various threats to stability are easier to see.

With that, the markets will be particularly sensitive to negative headlines that pass the wires; and there are plenty of topics that can trigger bearish sentiment. Surprisingly, the most infamous of the region’s members (Greece) does not pose the greatest threat. Nevertheless, there is plenty of negative press: how to handle bond swap holdouts, the IMF warning the country could have its disbursal postponed if milestones are missed and suggestions that there will be funding gaps going forward.

The markets have grown accustomed to Greek trouble. The true risk likes with the crisis spreading. On one side, we run the risk of seeing the other two Euro Zone members that received bailouts have to return for a second dose of support or demand accommodation similar to Greece. Ireland recently reported a 0.2 percent contraction in the fourth quarter, they are looking to win an extension on their €3.1 billion bailout payment due at the end of the month and there is a chance that they could vote themselves out of the chance to tap the ESM in the future. Portugal is a consistent concern for demanding further accommodation because of its pained growth outlook. Perhaps the most prominent threat is Spain. The recent decision by Prime Minister Rajoy to raise the deficit target for 2012 flies clashes with the EU’s demands. Meanwhile regional financing troubles and the banking sectors’ mispricing of real estate assets could prove a serious problem.

Crisis concerns are always kept at the forefront thanks to too many rounds of trouble within the region and the financial media, but the markets have become somewhat anesthetized to the ‘fat tail’ shocks due to the consideration of so many scenarios. This also curbs the short-term impact as we need a much greater risk present. That said, the current behind risk trends can always leverage a sizable reaction from the market. The S&P 500 continues to charge higher, yet we are still struggling for comfort in the drive. A strong jump in risk appetite could possibly play to the ECB’s hawkish lean, but a natural correction in capital markets could set fire to the euro on fire. – JK

--- Written by: John Kicklighter, Senior Currency Strategist for DailyFX.com

To contact John, email jkicklighter@dailyfx.com. Follow me on twitter at http://www.twitter.com/JohnKicklighter

To be added to John’s email distribution list, send an email with the subject line “Distribution List” to jkicklighter@dailyfx.com.

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

DISCLOSURES

News & Analysis at your fingertips.