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.

Free Trading Guides
EUR/USD
Bullish
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
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
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
GBP/USD
Mixed
USD/JPY
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
More View more
Real Time News
  • The scale of the monthly chart can be particularly useful in spotting systemic developments. Gold for example reflects enormous lift of a haven during supposed 'risk on'. The candle chart is gold equally weighted in USD, EUR, GBP and JPY. Orange is $GC_F https://t.co/4yEjT7FvGA
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.49% 🇨🇭CHF: 0.30% 🇪🇺EUR: 0.25% 🇳🇿NZD: -0.06% 🇨🇦CAD: -0.06% 🇯🇵JPY: -0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/OR9TIAZM1e
  • Food for thought https://t.co/WyOnOvnPbM
  • More people have filed for unemployment in the United States in the last three months than the entire population of Canada... In other news, $QQQ is just ~3% from its all-time high!
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 2.85% Gold: 0.73% Oil - US Crude: -0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/tCGrDwpnas
  • There really is no “taking one day off Twitter without something massive happening” is there? https://t.co/xRQ4wzhA43
  • With $EURUSD clearing 1.1000 this past week and the big swing the past few weeks, it seems remarkable progress for the benchmark currency pair. But consider the monthly picture. It is still awaiting the sentiment nod... https://t.co/4jBDlHwEqg
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.03%, while traders in US 500 are at opposite extremes with 75.77%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/BUbAYHNPIt
  • Amid escalating China tension, Australian Dollar risk reversals indicate that the bullish bias recently enjoyed by AUD/USD could soon unwind and pressure spot prices back lower. Get your AUD/USD technical analysis from @RichDvorakFX here: https://t.co/ZAHEwxNrEW https://t.co/cIFgSuoWF2
  • Update on #Cryptocurrencies #BITCOIN -0.31% #BITCOINCASH +0.70% #ETHEREUM +2.67% #RIPPLE -0.51% #LITECOIN +0.52%
Euro Granted More Breathing Room for Gains, For Now

Euro Granted More Breathing Room for Gains, For Now

2017-08-28 03:35:00
Christopher Vecchio, CFA, Senior Strategist
Share:
Euro Granted More Breathing Room for Gains, For Now

Fundamental Forecast for EUR/USD: Neutral

- ECB President Draghi’s speech at Jackson Hole didn’t explicitly do anything to promote a stronger Euro, but it certainly do anything to dissuade it either.

- Upcoming August Euro-Zone CPI data will show that price pressures have stabilized, after turning lower through the second quarter.

- Net-short EUR/USD positions have surged among retail traders in recent days.

The Euro was a top performing currency last week after European Central Bank President Mario Draghi’s speech at the Federal Reserve’s Jackson Hole Economic Policy Symposium. The speech was widely expected to contain some measure of disparagement for the Euro’s excessive strength in recent months, but the lack of any dovish commentary surprised market participants.

The scope of the reaction in EUR/USD on Friday needs to be put in context: it was a Friday afternoon during the late-summer, a period known for its low participation. Illiquid conditions created an environment ripe for an outsized move. Regardless of what ECB President Draghi said on Friday, EUR/USD was prone for a sizeable move.

For the time being, it appears that the ECB will keep its powder dry and wait to take a stand against Euro strength at some point down the road. The reality in FX markets is that with inflation so low, the Euro’s strength may only be tolerated for so long. The ECB’s technical assumption for EUR/USD in 2017 is 1.0800; it closed last week at $1.1920.

Whether or not EUR/USD can advance beyond 1.2000 in the near-term seems to be contingent upon the upcoming August Euro-Zone Consumer Price Index release on Thursday: a disappointing release would give validity to the notion that the strong Euro is and will continue to get in the way of the ECB achieving its policy goals. Even if ECB President Draghi didn’t explicitly talk down the Euro last week, any evidence that the ECB remains a while away from achieving its inflation target will revive speculation that the ECB will refrain from making a significant stimulus withdrawal announcement at its September policy meeting.

Otherwise, traders should start to begin looking beyond the summer months and get ready for a more active fall. Once the US Labor Day weekend passes next week, liquidity will return and participation levels will rise in markets. German elections in September haven’t garnered much attention, but will likely draw focus as the vote draws closer. The US government may be staring at a shutdown if a debt deal doesn’t materialize by the end of the month. For now, the Euro has been granted some room to rally, but there are plenty of obstacles and catalysts for volatility just around the corner.

See our Q3’17 Euro forecast - check out the DailyFX Trading Guides.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX.

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

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

DISCLOSURES

News & Analysis at your fingertips.