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
More View more
Real Time News
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST on DailyFX! A look at the levels heading into #FOMC - https://t.co/lxd5fZnn4H
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/Nx6AHxZksK
  • Markets Week Ahead: Euro, Dollar, Gold, S&P 500, Earnings, Inflation Check out @RichDvorakFX's latest market recap and preview plus all the weekly forecasts from the @DailyFXTeam at the link below! Link to Analysis - https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/07/25/markets-week-ahead-euro-dollar-gold-sp500-fed-earnings-inflation.html $EURUSD $SPX #Trading
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/xKkBwu951j
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/MYWlQphqtb
  • 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/QszmdZFxlk https://t.co/paOy1oQmn3
  • US indices have a packed week ahead with earnings from the major technology names, US GDP data due and an FOMC rate decision. With so much on the docket the potential for volatility is heightened. Get your stock market forecast from @PeterHanksFX here: https://t.co/CH4WoStHvu
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/otJwnuR7qe
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/s4lZWdJoXV
  • The US Dollar Index traded higher last week, sustaining its broader uptrend. Conflicting technical signals urge caution, but the directional bias remains skewed to the upside. Get your weekly USD technical forecast from @FxWestwater here: https://t.co/jcwhcsUBEN https://t.co/tKrlrRZlZn
Euro Gains versus Dollar Despite Clear Euro Zone Troubles – Why?

Euro Gains versus Dollar Despite Clear Euro Zone Troubles – Why?

David Rodriguez, Head of Product
Euro_Gains_versus_Dollar_Despite_Clear_Euro_Zone_Troubles_Why_body_Picture_5.png, Euro Gains versus Dollar Despite Clear Euro Zone Troubles – Why?Euro_Gains_versus_Dollar_Despite_Clear_Euro_Zone_Troubles_Why_body_Picture_6.png, Euro Gains versus Dollar Despite Clear Euro Zone Troubles – Why?

Fundamental Forecast for the Euro: Bearish

What a week for the Euro and the Euro Zone. The Dutch government collapses, Spanish unemployment surges and Standard & Poor’s downgrades Spanish government debt—yet the Euro trades to fresh monthly peaks! Pronounced weakness in the US Dollar was the real story, but the coming week brings a highly-anticipated European Central Bank rate decision as well as US Nonfarm Payrolls data. Volatility seems guaranteed.

How is the Euro stronger despite clear regional stresses? It isn’t; the US Dollar is weaker. Among G10 currencies only the Euro and the tightly-controlled Swiss Franc trade lower against the US Dollar through the month of April. What does this mean for short-term price action? Simple—it would likely take substantial US Dollar weakness to push the Euro/USD exchange rate to fresh multi-month peaks near $1.3380. Combined with a bearish technical forecast, we might see the EURUSD buck the trend and trade sideways or lower in the week ahead.

A late-week European Central Bank rate decision and US Nonfarm Payrolls report could have fairly significant effects on both the Euro and the US Dollar. Interest rate traders predict that the ECB will leave interest rates roughly unchanged through the coming 12 months, and as such a rate move seems exceedingly unlikely. Yet clear Euro Zone fiscal stresses emphasize that all is not well in the single currency zone, and many expect the central bank will need to step in with further aid for at-risk banks and sovereign nations. According to a Bloomberg News survey, most economists believe that President Mario Draghi and the governing council will soon restart the Securities Market Program (SMP) to buy sovereign debt. Will that happen at the upcoming meeting? We certainly can’t rule it out. And a positive reaction out of Spanish and periphery debt may actually provide a short-term EURUSD boost.

US Nonfarm Payrolls could be another key difference-maker. The US Dollar has sold off on expectations that the US Federal Reserve will keep interest rates near zero percent through the foreseeable future, and further disappointments in labor figures could only worsen forecasts. Predicting a Nonfarm Payrolls print—much less how the US Dollar may react—has historically been a fool’s errand. All that’s clear is that a material disappointment in April numbers could reignite speculation that the US Federal Reserve can ease monetary policy further and enact Quantitative Easing yet again (QE3).

Given market indecision surrounding Spain, France, the Netherlands, the United states, what really matters for the EURUSD? If correlations are to be believed, the US Dollar itself will continue to trade inversely to moves in the US S&P 500 and broader risky asset classes. This implies that further S&P gains may be enough to drive the EURUSD higher.

Financial markets remain especially complacent as stock markets edge near multi-year peaks. Yet the storm often comes after a prolonged period of calm. The S&P 500 Volatility Index (VIX) trades at a mere 16 percent—near its lowest since the onset of the financial crisis in 2008. Does that mean that stocks are headed lower? No. Yet we advise caution against becoming too bearish the USDOLLAR amidst relative calm. The turn could come sooner than expected or we may wait months. Yet the coming week’s event risk would be appropriate timing for the next major market moves. – DR

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

DISCLOSURES