Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Oil - US Crude
Wall Street
More View more
Real Time News
  • #NOK, #SEK and #AUD are expected to be the most-active #G10 FX with one-week implied volatility at 13.48, 11.43 and 11.04 respectively [delayed] -BBG
  • $XAGUSD: Short-term price action falls below 100 on CCI, while remaining above the 55 period EMA. Get your #silver market update from @Tams707 here:https://t.co/nkK3ZizKj0 https://t.co/lAd03ptyF4
  • @JohnKicklighter Who knows... perhaps their next venture will include printing fake meat for $BYND 😅
  • AUD/USD and NZD/USD drift into the crosshairs as an RBA decision and NZ jobs data loom.Get your market update from @RichDvorakFX here:https://t.co/1Z8ZqQK6ih https://t.co/Hc8cfQNtys
  • #NASDAQ100 hit an all time high over the past 24 hours, but key resistance held in futures $AUDUSD fell as local virus cases grew, awaiting the #RBA next What else is in store for APAC markets today? https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/08/03/Nasdaq-100-Record-High-Faces-Resistance-AUDUSD-Turns-to-RBA-Next.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/ImuoXUAeBa
  • Kodak shares surged over 2,100% in the first half of last week. At present, it is down 75% from its new record high. Cryptomining and Covid vaccine production support. Look, forward to the next turn. Maybe a camera-related venture... https://t.co/7neSCnwzW8
  • 🇰🇷 Inflation Rate YoY (JUL) Actual: 0.3% Expected: 0.35% Previous: 0% https://www.dailyfx.com/economic-calendar#2020-08-03
  • 🇰🇷 Inflation Rate YoY (JUL) Actual: 0.3% Expected: 0.35% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2020-08-03
  • Heads Up:🇰🇷 Inflation Rate YoY (JUL) due at 23:00 GMT (15min) Expected: 0.35% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2020-08-03
  • The Japanese Yen saw large inflows with bullish positioning rising some $1.1bln to $3.4bln as the precipitous decline in US yields dragged USD/JPY lower.Get your market update from @JMcQueenFX here: https://t.co/SJN9QC3kEF https://t.co/xcXG9Qk3Da
Positioning Unwind May be Driving Factor, Not QE, for Euro

Positioning Unwind May be Driving Factor, Not QE, for Euro

2014-12-14 19:10:00
Christopher Vecchio, CFA, Senior Strategist
Positioning Unwind May be Driving Factor, Not QE, for Euro

Fundamental Forecast for Euro: Neutral

- The technical prospects of a top in the US Dollar (vis-à-vis the USDOLLAR Index) have accumulated the past week.

- EURUSD and USDCHF wedges hint at possibility of bottoms in European FX starting to take shape.

- Have a bullish (or bearish) bias on the Euro, but don’t know which pair to use? Use a Euro currency basket.

The Euro stabilized in the second week of December, just a few days after hitting fresh yearly lows below $1.2250 against the US Dollar. EURUSD closed on Friday with a five-day gain of +1.44%, finishing the week at $1.2459. The 18-member currency only closed lower versus the Japanese Yen, with EURJPY declining by -0.81% to ¥147.95. Although chatter regarding a potential QE program from the European Central Bank has only increased in the wake of its December 4 meeting, the combination of year-end portfolio rebalancing and overstretched short positioning may be contributing to the recent rebound.

For several months, the futures market has been stretched with net-short Euro positions. Peak bearishness was evident in early-November, when traders were net-short to the tune of 179.0K contracts for the week ended November 4. As of December 9, short positions were being lifted, contributing to the recently choppy rate of decline, having eased to 136.9K contracts. Herein lies the longer-term hope for bears: even as short positions abated from November 4 to December 9, EURUSD has still managed to decline by -1.37%.

Even if any upward drift in recent days is the result of further short covering – something we won’t have definitive proof of until the next release of the CFTC’s Commitment of Traders report on December 19 – traders need to be aware of this threat into trading conditions around the holidays. Overarching fundamental themes of 2014 could lose gravitational pull on price as traders’ anxiety to close their books builds.

Although economic conditions have moved off the low, the Euro-Zone remains in an economic state on the verge of its third recession since the financial crisis began in 2008. The Citi Economic Surprise Index closed the week at -20.3, barely changed from the prior weekly close on Deecmber 5 at -21.4, and little changed overall over the past month, when the index was at -26.4 on November 14.

The greatest source of distress that should hold back market participants from helping the Euro set anything other than a short-term bottom is the ongoing pressure in medium-term inflation expectations. The 5Y5Y breakeven inflation swap, ECB President Mario Draghi’s purported preferred market measure of medium-term inflation expectations, slumped to a new yearly low. The gauge fell as low as 1.364% on Friday and closed the week at 1.377%.

With inflation expectations still disparingly low, the ECB’s doves will continue to chirp about a potential QE program, which should be a big enough threat to keep a major Euro rally from commencing. Several policymakers have stated their desire to see the ECB’s balance sheet move back towards its early-2012 levels (roughly €2.6 to €3.1 trillion), and there are few signs that the current measures are accomplishing just that: as of December 5, the ECB’s balance sheet stood at €2.04 trillion, barely higher than the €2.01 trillion it was three-months earlier. Euro bulls shouldn’t get too comfortable just yet. –CV

To receive reports from this analyst, sign up for Christopher’s distribution list.

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


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.