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
Wall Street
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
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • The $VIX can't continue to trace out this coasting pattern for long. Again, I don't usually throw technical analysis on indicators derived from underlying activity, but VIX has become a trading vehicle in its own right https://t.co/qBvMeOCmmW
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Silver: 0.31% Oil - US Crude: -0.08% Gold: -0.32% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/DpPoyNP5hl
  • After a strong breakout this summer, Gold prices have now spent almost six months digesting. Get your $XAUUSD market update from @JStanleyFX here:https://t.co/H7k5kv4N5i https://t.co/shvReKpe1U
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in Germany 30 are at opposite extremes with 70.32%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ivQLPokYOs
  • The US Dollar is now trading lower again. After hitting an intraday low around 90.15, the $DXY rebounded to 90.25 but has turned toward again, falling back below 90.20. $USD https://t.co/xyglMBmakL
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: France 40: 0.14% Wall Street: 0.06% US 500: 0.03% Germany 30: 0.02% FTSE 100: -0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/SbFlX1iTdj
  • #Gold is consolidating slightly higher this week, around $1,850, after the precious metal's failed attempt at breaking above the $1,870 level last week. $XAU $GLD https://t.co/MyeWiBSQZR
  • US 10yr yields have notably tightened, falling from 1.10% yesterday to trade around 1.04% today. Yields still remain elevated in 2021 compared to earlier in the pandemic. $GOVT $IEF $USD https://t.co/uT27KDUkhM
  • Hey traders! Get your Tuesday market update from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/WPk9aapKhs
  • $EURGBP is currently trading around 0.8855, nearing the lows set around 0.8840 last week. A break below this level would mark the pair's lowest level since May. $EUR $GBP https://t.co/QinuctvrVK
Euro Traders Dangerously Complacent – How Long does it Last?

Euro Traders Dangerously Complacent – How Long does it Last?

David Rodriguez, Head of Product
Euro_Traders_Dangerously_Complacent_How_Long_does_it_Last_body_Picture_1.png, Euro Traders Dangerously Complacent – How Long does it Last?

Fundamental Forecast for the Euro: Neutral

The Euro finally showed signs of weakness as it fell against the US Dollar (ticker: USDOLLAR) for the first week in six on similar corrections in European and global stock markets. Yet the previously high-flying EURUSD remains an impressive 900 pips above July’s multi-year lows, and it will take a larger pullback to suggest an important top is in place.

A relatively empty European economic calendar and no major developments in European politics kept volatility low, but the coming week could change that as the Spanish government announces its budget for 2013. Spain is likely to announce fresh fiscal austerity measures as it contends with a crisis of confidence. Many believe that the budget announcement represents the last step before a formal request for aid from the troika of the European Commission, European Central Bank, and International Monetary Fund.

We can’t help but feel a sense of déjà vu as the euro braces for the seemingly inevitable Spanish request for a bailout. Yet a substantial improvement in European bond markets suggests that Spanish Prime Minister Rajoy is in no rush to formally seek aid.

The European Central Bank bought some time as it announced potentially unlimited bond purchases for at-risk Euro sovereigns through the Outright Monetary Transactions (OMT) system. The ECB emphasized that such support was conditional on a country’s submission to the oversight of the troika via the EFSF or ESM, but that didn’t stop investors from sending Spanish bond yields sharply lower. The cost to protect against a Spanish default over five years has fallen 34 percent this month alone and is down nearly 50 percent from its July peak.

International investors are clearly willing to give Spain’s government the benefit of the doubt on whether it will ask for and ultimately receive fiscal aid, but what if its politicians fail to deliver? Extremely low volatility and risk premiums across financial markets show that few traders fear such a disappointment.

Euro/US Dollar options show traders predict the smallest Euro moves since the onset of the global financial crisis in 2008. The last time we saw 1-month implied volatility levels this low was when the Euro topped at $1.3280 in May and the all-time record of $1.60 in 2008. These could be mere coincidences of course, but we can’t ignore the risk that quiet markets have lulled traders into a dangerous state of complacency. In other words—markets could be just a bit too quiet and the next episode of real turbulence could be around the corner.

Could the turn in sentiment happen next week? It would seem fitting given the real risk that Spain’s government could disappoint those positioned for the country’s bailout and the ECB’s bond buying. Yet betting on the turnaround is extremely difficult, and we’ll need to see real signs of reversal before claiming that the Euro may have set an important top.

It’s shaping up to be another make-or-break week for the Euro as it comes off of its strongest 30-day rally since late 2010.

The same risk of complacency exists in the US S&P 500 and broader risky assets. Question is—how long can it last? – DR

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

DISCLOSURES