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.



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
Please try again
Wall Street
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
More View more
Real Time News
  • #Gold 120min - Working that slope!
  • Iron drops below $100/ton as China steel cuts weigh on demand
  • Bitcoin price action loses traction below the key psychological level of $48,000. Get your market update from @Tams707 here:
  • the S&P 500 has tested this resistance zone every day this week 4472-4479 $ES $SPY $SPX buyers haven't given up, have continued to offer support with higher lows over the past few days current support at 50% fibo of aug-sept mm
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here:
  • $USD breakout pulling back a bit but so far, that pullback has held support in the prior resistance zone $DXY
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here:
  • ECB's Makhlouf says fears of excessive inflation are exaggerated $EUR
  • It seems the markets are riding high, but risk is always lurking around the corner. Consider your escape plan before you find yourself in collapsing market. What are the top havens for different conditions in 2021? Find out from @JohnKicklighter here:
  • Angola to cut November oil exports to lowest since at least 2008 - Angola exported 1.1mbpd of crude oil in September, according to Refinitiv
Mounting Brexit Tensions Weighing on Euro as UK Vote Nears

Mounting Brexit Tensions Weighing on Euro as UK Vote Nears

Christopher Vecchio, CFA, Senior Strategist
Mounting Brexit Tensions Weighing on Euro as UK Vote Nears

Fundamental Forecast for EUR/USD: Neutral

- Volatility is likely to remain higher (and possibly run higher) between now and June 23.

- Recent technical developments favor near-term downside in EUR/USD ahead of FOMC.

- FX market volatility is rising ahead of the UK-EU referendum – it’s a good time to review risk management principles.

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

The Euro was weak across the board last week, gaining ground only against the beleaguered British Pound (EUR/GBP +0.79%) as Brexit tensions continued to rise. Even on advance to the June FOMC meeting, where it looks like the Federal Reserve will keep rates on hold, the US Dollar gained ground versus the Euro (EUR/USD -1.03%). With a number of recent polls showing that the ‘vote leave’ campaign is gaining momentum, volatility has risen in FX markets as investors have jettisoned the Sterling the past two weeks. Needless to say, the concerns are spilling over to the Euro.

The Brexit component for the Euro is clear: it raises the question of how permanent being a member of the European Union actually is. Who is to say that if the UK can’t change its membership, why couldn’t a peripheral country like Greece? Or a core country like Holland? The narrowing of the recent UK-EU referendum polls in the run up to the June 23 vote is increasing the probability of these questions from being answered – which would be to the Euro’s detriment.

There’s good reason to believe that the overhang of a potential Brexit is the main driver of Euro weakness in the near-term (aside from the rise of volatility in tandem): Euro-Zone economic data hasn’t been terrible. The Citi Economic Surprise Index for the Euro-Zone closed last week at -2.5; one month ago it was -7.4. Energy prices remain elevated, which should help inflation later this year and early next (although there’s been little corresponding reaction in the 5-year, 5-year inflation swaps, which had been tracking Brent Crude for much over the past two years – something to keep an eye on).

As a result of the more positive (less negative?) non-Brexit related Euro-centric developments, markets aren’t convinced that the European Central Bank is planning on easing again this year. Overnight index swaps are only pricing out 4.6-bps from the deposit rate by December, while 4.5-bps have been priced out of the main refinancing rate. Likewise, stability in the data has led to EONIA markets pricing in approximately 7-bps of rate cuts by December.

In other terms, this means that overnight index swaps markets are pricing in less than a 40% chance of cuts to the deposit and main refinancing rates. Assuming recent Euro weakness is brought on by Brexit fears, the UK will have to deliver a ‘leave’ resolution in order for the Euro to stay lower; otherwise market participants don’t appear to be setting up the Euro for long-term weakness. Even though much of the attention over the next few days will go to the US Dollar around the June 15 FOMC meeting and the British Pound around the June 23 UK-EU referendum, don’t forget the Euro – it will very much be at the center of the market action. –CV

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

If you haven't yet, read the Q2'16 Euro Forecast, "EUR/USD Stuck in No-Man’s Land Headed into Q2’16; Don’t Discount ’Brexit’," as well as the rest of all of DailyFX's Q2'16 quarterly forecasts.

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