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.

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
More View more
Real Time News
  • 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/t9FlspUVZz https://t.co/FFMy5O9YoY
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/jZHcyAZ5SU
  • Further your forex knowledge and gain insights from our expert analysts on EUR with our free guide, available today: https://t.co/XtydfV5wS6 https://t.co/Iw9haaHAnn
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sr63f https://t.co/raO3gCGqQ6
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/rWVlBs6H3c
  • The update to the US Consumer Price Index (CPI) is likely to sway the US Dollar during the Federal Reserve’s blackout period as the central bank braces for a transitory rise in inflation. Get your weekly $USD forecast from @DavidJSong here: https://t.co/JTuP7CLlyi https://t.co/tOvqn3Gdpc
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/s5dn4ZKnku
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACyvdZ https://t.co/6VjW5FEiQW
  • Global stocks bounce back from recent pullback as key resistance levels lie ahead. Get your weekly equities forecast from @HathornSabin here: https://t.co/wXSWo1JygD https://t.co/vWVaSEQTXT
  • 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/t9FlspUVZz https://t.co/9kfBu04auM
Euro Forecast: Outlook for EUR/USD Turns Bearish

Euro Forecast: Outlook for EUR/USD Turns Bearish

Martin Essex, MSTA, Analyst
EURUSD Chart

Fundamental Euro Forecast: Bearish

  • EUR/USD reversed direction last week as it turned sharply lower in response to a decision by the European Central Bank to keep Eurozone interest rates unchanged rather than cut them as most traders and analysts had expected.
  • The ECB’s decision raised fears that it is failing to respond sufficiently to the threat of an economic recession prompted by the Covid-19 coronavirus pandemic.
  • The downturn in EUR/USD may therefore continue even though the US Federal Reserve is expected to cut US interest rates again this week to help stimulate the US economy.

Euro price to weaken further?

The Euro was undermined last week by a European Central Bank decision to keep all its key interest rates unchanged. Even though it announced several other measures to ease monetary policy, many traders and analysts – who had been expecting rate cuts – were dismayed, and that is likely to prompt further selling of EUR/USD in the week ahead.

The ECB decision disappointed Euro bulls because it was interpreted by many as a failure to respond sufficiently to the economic threat posed by the Covid-19 coronavirus pandemic, instead increasing pressure on Eurozone governments to ease fiscal policy.

EURUSD Price Chart, Hourly Timeframe (March 9-13, 2020)

EURUSD price chart

Chart by IG (You can click on it for a larger image)

By contrast, the Federal Reserve is now widely expected to reduce US interest rates again this week even though it has already made an emergency half-point cut this month. While such a move might usually weaken the US Dollar, this time it might be interpreted as a strong response to the economic risks and therefore lead to a continuation of the USD buying seen last week.

US President Donald Trump’s announcement of a travel ban on 26 European countries is another potential negative for the Euro, which could also be hit by heavy selling of Italian government bonds that has led to a surge in yields in the European country hardest hit by the coronavirus.

Italy 10-Year Bond Yield Chart, Daily Timeframe (October 8, 2019 – March 13, 2020)

Italy 10-year bond yield

Source: Investing.com

Week ahead: German ZEW

Against this background, the week’s data are unlikely to have much of an impact on the Euro but there could be a response to the ZEW economic sentiment index for Germany in March, due Tuesday. Analysts polled by the Reuters news agency are predicting a drop from 8.7 to minus 23.4, a number that would emphasize how confidence has fallen off a cliff in the Eurozone’s largest economy.

--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below

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

DISCLOSURES