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
Bearish
Oil - US Crude
Mixed
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
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
GBP/USD
Mixed
USD/JPY
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
More View more
Real Time News
  • What are the truths and lies of #forex trading regardless of your #tradingstyle here: https://t.co/uF75VPzstr https://t.co/cuH9YESlr2
  • The $SGD is driven by the Monetary Authority of Singapore, which manages exchange rate instead of short-term interest rates. Learn more on the SGD and how to trade it. Get your SGD market update from @ddubrovskyFX here:https://t.co/eWLM9XZs5Y https://t.co/HdiCLtSFre
  • #Bitcoin prices may see a pickup in volatility ahead of the 2020 halving as the #coronavirus pandemic threatens to disrupt cross-continental $BTC mining operations. Get your market update from @ZabelinDimitri here: https://t.co/BoH24MVf4P https://t.co/4bgTwNqVvG
  • (Weekly Outlook) The Japanese #Yen faced a mixed week against currencies such as the US Dollar, Euro, British Pound and Canadian Dollar. What is ahead for $USDJPY, $EURJPY, $GBPJPY and $CAD/JPY? - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2020/04/04/Japanese-Yen-Weekly-Forecast-USDJPY-EURJPY-GBPJPY-CADJPY.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/Flgbd5b2ag
  • Foreign exchange – or “#forex” – markets often pay close attention to politics and central bank policy. We offer a model for traders to gauge their impact on exchange rates. Get your market insight from @ZabelinDimitri and @CVecchioFX here: https://t.co/FbXc1Awu6a https://t.co/Qbhs4ndgPa
  • Why must financial market traders monitor both monetary and fiscal policy? Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/AldbSctm9V
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/yF133btXFd https://t.co/Sjnr0iVgAf
  • Upside momentum stalls with the #DAX and #FTSE 100 vulnerable to testing lower levels as the economic backdrop deteriorates further. Get your #equities technical analysis from @JMcQueenFX here: https://t.co/BFIaXTfDcs https://t.co/q0Mso4zWlT
  • RT @iv_technicals: *TRUMP SAYS HE'D USE TARIFFS IF NEEDED TO PROTECT OIL INDUSTRY - BBG #OOTT #WTI $USO
  • After the pattern is composed with the closing of the signal candle, then you can look to the following candle to identify a clear bias and risk points. Learn how to apply this knowledge to a trading strategy here: https://t.co/uh3NwgHBVv https://t.co/yl4KUMNmUh
Euro Forecast: New Month, Old Concerns for the Euro

Euro Forecast: New Month, Old Concerns for the Euro

2018-09-03 14:00:00
Christopher Vecchio, CFA, Senior Strategist
Share:
Euro Forecast: New Month, Old Concerns for the Euro

Fundamental Forecast for EUR/USD: Neutral

- The Brexit negotiations remain a potent catalyst, evidenced by the sharp turnaround in EUR/GBP following comments by the EU’s Barnier last week.

- A fresh wave of weakness among emerging market economies is weighing on EUR/USD again, just like at the start of August.

- The IG Client Sentiment Indexremains ‘neutral’ for the Euro after flipping from ‘bearish’ in mid-August.

See our long-term forecasts for the Euro and other major currencies with the DailyFX Trading Guides.

The Euro finished in the middle of the road last week, gaining ground against three major currencies while falling against four others. Two of the major themes guiding the Euro in recent weeks made pronounced developments last week, providing EUR-crosses all the ammunition needed for more significant volatility to end August. Moving forward, the same influences will reign supreme as the calendar moves into the last month of the third quarter.

Looking into September, any signs that the possibility of a hard Brexit are diminishing will continue to weigh on EUR/GBP in a meaningful way. The final week of August saw EUR/GBP slump by -1.00% after the EU’s chief negotiator on Brexit, Michel Barnier, said that the EU was “prepared to offer Britain a partnership such as there never has been with any other third country.” And vice-versa: should no agreement come to fruition in the coming weeks, any goodwill established at the end of August that saw EUR/GBP lower could easily produce higher EUR/GBP rates in September.

The other major influence traders need to watch for is how European Central Bank policy evolves as a result of the potential contagion impact the Turkish Lira meltdown may yet bring. According to the Bank of International Settlements, Turkish borrowers owe European lenders $194 billion, much of which is unhedged. As such, any sustained depreciation by the Turkish Lira could very well set off a wave of defaults on these obligations, forcing European banks to write down bad loans. The erosion of excess capital held by European banks could give the ECB pause to its current plans to wind down its QE program by December 2018 and raise rates by “summer 2019.”

Otherwise, outside of the Brexit negotiations and potential contagion from Turkey – which has clearly manifested itself in ways beyond the Euro, given the widespread issues plaguing emerging market currencies – there is very little by way of the calendar to look for that could catalyze price action in the week ahead: there are no ‘high’ rated events in the first full week of September; and the ‘medium’ ranked data releases fall lower on the scale of importance unto themselves.

If the calendar does produce any action, it will likely be around either the July Eurozone Retail Sales report due on Wednesday or the final Q2’18 Eurozone GDP release on Friday (which is the third iteration of the report, so it should have a muted impact overall).

Finally, positioning warrants a quick mention, if only for record keeping. According to the CFTC’s COT report released on Friday, speculators held net-short positions in the Euro for the first three-week period going back to April 2017. For the week ended August 28, 2018, there were 7.2K net-short contracts held, a slight increase from the 4.8K contracts held in the week prior. For the foreseeable future, especially through September, positioning is a non-factor for the Euro.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- 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.

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

DISCLOSURES

News & Analysis at your fingertips.