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
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
Oil - US Crude
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
Wall Street
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
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.14%, while traders in EUR/USD are at opposite extremes with 69.34%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/QCLjR5fkOu
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 1.13% Wall Street: 0.66% Germany 30: 0.04% FTSE 100: -0.01% France 40: -0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/Swr0ndo7tu
  • $EURUSD is currently setting fresh intraday highs above the 1.2080 level, edging above the highs set earlier in the week to hit its highest level since early March. $EUR $USD https://t.co/wcARbp81Et
  • EUR/USD appears to be stuck in a narrow range as the European Central Bank (ECB) retains the current course for monetary policy. Get your $EURUSD market update from @DavidJSong here:https://t.co/UdgBEQ3MCi https://t.co/uwkNwc1Ikm
  • US Indices are stronger today, recovering from yesterday's selloff driven by capital gains tax headlines. DOW +0.68% SPX +1.17% NDX +1.53% RUT +1.49% $DIA $SPY $QQQ $IWM
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.02%, while traders in US 500 are at opposite extremes with 68.36%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/8OCSgtJeBx
  • there's a bullish channel in here the spans back to last year's q4 $EURJPY support side was tested this morning but bulls making a strong push back-above the 130 handle https://t.co/gHQtawE3BH https://t.co/3XU9kb72f5
  • $EURJPY has mostly been consolidating between the 129.50 and 130.50 levels in April, trading around its highest point since the fall of 2018. The pair hit a fresh multi year high just shy of the 131.00 level earlier this week. $EUR $JPY https://t.co/M9gO4rcOZh
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.68% Gold: -0.42% Silver: -0.66% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/cHoZ7KZRDX
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.46% 🇦🇺AUD: 0.35% 🇨🇭CHF: 0.21% 🇬🇧GBP: 0.07% 🇨🇦CAD: 0.06% 🇯🇵JPY: 0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/ngF6ZwsVQk
Euro Dangerously Exposed to ECB Rate Decision, Cyprus and Greece

Euro Dangerously Exposed to ECB Rate Decision, Cyprus and Greece

John Kicklighter, Chief Strategist
Euro_Dangerously_Exposed_to_ECB_Rate_Decision_Cyprus_and_Greece__body_Picture_5.png, Euro Dangerously Exposed to ECB Rate Decision, Cyprus and Greece

Euro Dangerously Exposed to ECB Rate Decision, Cyprus and Greece

Fundamental Forecast for Euro: Bearish

  • Spain downgrades growth forecast, raises debt expectations
  • Bond fund PIMCO sells Italian, Spanish bonds after run up
  • EURUSD sliding, but committed bearish break remains elusive

There is a laundry list of fundamental landmines for euro traders to watch moving forward – and that means volatility and even trend development should be expected for EURUSD and other crosses. In the past week, the Euro-region has generated more than its fair share of unflattering headlines – Italy’s struggle to form a government, Spain downgrading growth, Germany showing signs of sympathy pains. Yet, market participations have grown numb to vague threats to regional stability. What is needed to give the shared currency drive are definitive developments that legitimately alter the outlook for risk and return when investing in the euro-based assets.

When laying out the scenarios for what lies ahead, there is one particular event on the docket that should have traders’ attention: the European Central Bank (ECB) rate decision. Recently, we haven’t expected much from the central bank as they have maintained their stoic poise and consistently announced a hold on both the benchmark lending rate (at 0.75 percent) as well as the extra-ordinary support systems (maintaining the threat of activating the Outright Monetary Transaction – or OMT – program). Yet the group’s passive policy bearing could be shattered this week – at least economists think so.

While many Eurozone member economies have reported severe recessions and soaring unemployment, the malaise has done little to sway monetary policy officials to sympathy with additional stimulus measures. Assumptions seem to be changing, however, with this past week’s headlines dominated by speculation that the ECB will finally break after Germany’s economic strength showed signs of softening in PMI figures (considered timely stand-ins for official GDP readings). In turn, bank-based economists have been casting votes predicting a rate cut. In fact, Bloomberg’s consensus amongst economists shows 60 percent believe a 25 basis point (bp) cut to 0.50 percent is on the agenda. Ultimately though, how market moving this event proves depends on the degree of expectation amongst speculators.

If were running off of financial headlines, it would seem that the market is positioning for the risk of an impending cut to the benchmark lending rate. That said, we find little of that dovishness / bearishness priced in to swaps or the Euro’s bearings this past week. From short-term rates, we can back out zero probability of a rate move (though this may be warped by already-extreme low market yields); and EURUSD has stubbornly held to the 1.3000 level. Normally, when we head into an event and expectations are comprehensive; we find the currency will move ahead of time and temper the ultimate reaction to the actual outcome – the basis for the ‘buy the rumor, sell the news’ adage. Yet, if the market doesn’t move to better accommodate that negative outcome, the reaction could prove violent.

Fundamentally speaking, a rate cut would do little to fix the deeper issues plaguing the Eurozone (easing when the benchmark is near zero offers only marginal return); but it would significantly reduce the perceived yield advantage the euro has. Market rates for the region are extremely low – due to programs like LTRO – but the a benchmark rate higher than its US counterpart gives the currency gives the impression that it would lead a rally with higher return during an eventual recovery. What this means for traders is a possibly violent but short-term selling pressure. The lasting bearish outcome and economic support would be the introduction of an expansive stimulus program like the Fed or BoJ programs, but the ECB is already locked into the OMT.

The ECB policy decision will come on Thursday, but there is plenty of event risk to be concerned with before then. Of particular concern are the two members most at-risk of eventually leaving the Eurozone one day: Cyprus and Greece. The former’s parliament will hold a vote on Tuesday whether they want to accept the bailout form the EU and the harsh conditions that accompany it. Under similar circumstances, the EU is scheduled to decide Monday whether Greece will receive its next tranche of aid, but first the country needs to pass another round of austerity. Amongst other concerns to keep an eye on, Spain’s 1Q GDP reading is due. After the Bank of Spain’s painful assessment and the government’s downgrade of growth and ballooned budget deficit forecasts, the situation seems bleak. Also, Italy is still without an effective government, but for the first time since the February vote, a viable solution may be at hand. –JK

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

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

Sign up for John’s email distribution list, here.

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

DISCLOSURES