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.

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
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
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
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
  • House Financial Services Committee schedules second GameStop hearing for March 17 - BBG $GME
  • Speaker Pelosi says minimum wage increase will not be removed from House Covid bill - BBG
  • Asia-Pacific equities opened broadly lower amid a 'risk off' sentiment following a sour lead from Wall Street overnight. Rising yields and a stronger US Dollar exerted downward pressure over risk assets. https://www.dailyfx.com/forex/market_alert/2021/02/26/Dow-Jones-Falls-on-Rising-Yields-ASX-200-Nikkei-225-Tumble-.html https://t.co/3p7prANkLA
  • The Australian Dollar looks poised to outperform the haven-associated US Dollar and Japanese Yen. However, it may lose ground to the New Zealand Dollar. Key levels for AUD/USD, AUD/JPY and AUD/NZD.Get your $AUD market update from @DanielGMoss here:https://t.co/cuxRxl5WaF https://t.co/MD0ppnO7t6
  • RT @FxWestwater: $NZDUSD, $NZDJPY React as Soaring Treasury Yields Skew Market Risk Profile Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2021/02/26/NZDUSD-NZDJPY-React-as-Soaring-Treasury-Yields-Skew-Market-Risk-Profile.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr $TNX https://t.c…
  • Biden authorized strikes on Iran-backed militant groups. Strike was in response to attacks on US, coalition forces -BBG citing DOD #CrudeOil
  • The commodity-sensitive Canadian Dollar may continue outperforming its major counterparts in the coming weeks. USD/CAD, CAD/CHF, CAD/JPY and EUR/CAD key levels to watch. Get your market update from @DanielGMoss here:https://t.co/KYdUv2lpFC https://t.co/ZZUJ4AZEhc
  • Market Snapshot: Risk aversion is deepening as Friday APAC trade gets going $NZDUSD and $AUDUSD sinking Following declines in #SP500 and #Nikkei225 futures #USD broadly higher, anti-risk Japanese #Yen as well US 10-Year Treasury rates remain higher https://t.co/gQ50vS73P0
  • RBNZ's Orr: To consider settings against types of home lending, financial stability policies can help government housing objectives -BBG
  • RBNZ's Orr: Only focused on inflation, employment targets -BBG
Euro Forecast: EUR/USD Week Ahead Outlook Poor, ECB Meeting in Focus

Euro Forecast: EUR/USD Week Ahead Outlook Poor, ECB Meeting in Focus

Martin Essex, MSTA, Analyst

Fundamental Euro Forecast: Neutral

  • After the recent falls in EUR/USD there are plenty of reasons to still be bearish, including weak German economic growth, another political crisis in Italy and a slow vaccine rollout in the EU.
  • Moreover, little is expected from the coming week’s ECB meeting, with all the central bank’s key settings likely to remain unchanged.
  • However, it is also possible that all the bad news has been priced in to the exchange rate already and that – barring a strong risk-off move that boosts the US Dollar – the Euro will spend the week stabilizing before perhaps weakening further.
Advertisement

Euro price outlook poor

The last few sessions have been terrible for EUR/USD bulls, who have had to cope with a firmer US Dollar, news that German GDP growth fell by 5% in 2020, yet another political crisis in Italy and a slow coronavirus vaccine rollout in the EU.

On the bright side, European Central Bank President Christine Lagarde was optimistic, predicting an economic recovery as Covid-19 uncertainty wanes and adding that the EU has all the tools it needs to overcome the crisis. A further flood of money into the perceived safety of the USD also seems unlikely given President-elect Joe Biden’s fiscal plans to stimulate the US economy and continuing monetary stimulus from the Federal Reserve despite talk that it might taper its asset-buying program.

Against this background, a period of stabilization seems likely but after that a further period of weakness cannot be ruled out despite the ECB’s concerns over the exchange rate and inflation – things it has little power to influence.

EUR/USD Price Chart, Daily Timeframe (October 14, 2020- January 14, 2021)

Euro Forecast: EUR/USD Week Ahead Outlook Poor, ECB Meeting in Focus

Source: IG (You can click on it for a larger image)

EUR Forecast
EUR Forecast
Recommended by Martin Essex, MSTA
Download our fresh Q1Euroforecast
Get My Guide

ECB on hold

Usually, in a week when the ECB meets to determine its next monetary policy moves, all eyes would be on the meeting, and indeed Thursday’s announcement and subsequent news conference will be the focus of attention. However, its importance has been reduced by last week’s release of the minutes of the December meeting that included a comment that lowering yields further might have negative side effects and voiced concern again over risks related to developments in the exchange rate that might have negative consequences for the inflation outlook.

This suggests that the ECB will leave all its monetary settings where they are and that the meeting will leave the Euro unmoved – unless Lagarde missteps at the subsequent news conference.

Like to know more about how central banks impact the FX market? Our guide is here

Thursday’s Eurozone calendar

Euro Forecast: EUR/USD Week Ahead Outlook Poor, ECB Meeting in Focus

Inflation, ZEW and PMIs due

On the subject of inflation, final figures for Germany in December are released Tuesday and for the Eurozone as a whole Wednesday but as ever these will have little impact unless they are markedly different from the preliminary data published already.

More important are likely to be Tuesday’s ZEW economic sentiment index for Germany in January and Friday’s flash purchasing managers’ indexes, also for January. These PMIs are all expected to be a tad lower than in December, which would add to the general mood of pessimism around the Euro.

Starts in:
Live now:
Mar 02
( 10:03 GMT )
Recommended by Martin Essex, MSTA
Trading Sentiment
Register for webinar
Join now
Webinar has ended

We look at currencies regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

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

DISCLOSURES