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
  • Please join @ddubrovskyFX at 20:00 EST/00:00 GMT for a webinar on what other traders' buy/sell bets say about price trends. Register here: https://t.co/AzOQip9B3r https://t.co/tYPv6QYQIG
  • US Dollar Outlook: Fed Decision Due - Will it Spark Fireworks? The $DXY edged lower on Tuesday with $EURUSD, $GBPUSD, and $USDJPY all feeling Dollar weakness. Will the Fed catch markets off-guard with another hawkish surprise tomorrow? Link to Analysis - https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2021/07/27/us-dollar-outlook-fed-decision-due-will-it-spark-fireworks.html https://t.co/iTt0jJiuUC
  • Crude oil prices are trading largely unchanged following last week's rebound as the Delta variant of Covid and Chinese regulatory measures temper the near-term demand outlook. Get your market update from @FxWestwater here:https://t.co/T3oQa9qksd https://t.co/qgDReDbtcd
  • USD/JPY price action has weakened sharply on the session but is searching for support. Get your $USDJPY market update from @RichDvorakFX here:https://t.co/s6baPFYuS3 https://t.co/1ze3cKJytb
  • RT @BrendanFaganFx: Nasdaq 100 Outlook: Stocks Decline Despite Stellar Tech Earnings, All Eyes Shift to Fed $AAPL $MSFT $GOOG $QQQ $NDX L…
  • $SPX put in for an impressive midday recovery this past session leaving a large lower wick. The scale of the lower wicks consistently larger than corrections off highs https://t.co/BGkiFUwYsk
  • 🇰🇷 Consumer Confidence (JUL) Actual: 103.2 Previous: 110.3 https://www.dailyfx.com/economic-calendar#2021-07-27
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.53% 🇬🇧GBP: 0.44% 🇨🇭CHF: 0.13% 🇦🇺AUD: -0.32% 🇨🇦CAD: -0.46% 🇳🇿NZD: -0.60% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/foLJDv5tkA
  • US API Stock Changes Crude -4.728M Cushing -0.126M Gasoline -6.226M Distillate -1.882M #OOTT $CL_F
  • RT @Nadex: The Macro Setup is back! Tune in as @GuyAdami, @RiskReversal, and special guest @CVecchioFX discuss: -Stocks lower ahead of big…
EUR/USD Vulnerable to Further Losses on More Cautious ECB Rhetoric

EUR/USD Vulnerable to Further Losses on More Cautious ECB Rhetoric

David Song, Strategist

Talking Points:

- GBP/USD Risks Near-Term Correction Following Failed Attempt to Test October-Low (1.3027).

- EUR/USD Vulnerable to Further Losses on More Cautious ECB Rhetoric.

DailyFX TableGBP/USD

The British Pound pares the sharp decline following the dovish Bank of England (BoE) rate-hike, with GBP/USD at risk of staging a near-term advance following the failed attempt to test the October-low (1.3027).

The BoE appears to be in no rush to further normalize monetary policy after raising the benchmark interest rate for the first time since 2006, and Governor Mark Carney and Co. may endorse a wait-and-see approach at the next meeting on December 13 as officials warn the ‘uncertainties associated with Brexit are weighing on domestic activity, which has slowed even as global growth has risen significantly.’ Limited bets for higher borrowing-costs may undermine the resilience in GBP/USD, with the pound-dollar exchange rate at risk of facing a more bearish fate especially as the Federal Open Market Committee (FOMC) is widely anticipated to developer a 25bp in December.

Nevertheless, a pickup U.K. Manufacturing & Industrial Production may boost the appeal of Sterling as it instills an improved outlook for the real economy, and the Monetary Policy Committee (MPC) may adopt a more hawkish tone over the coming months as‘spare capacity appeared to have eroded, if anything, a little more rapidly than the Committee had anticipated in its August projections.’ With that said, the monthly opening range remains in focus for GBP/USD, with the pair at risk of trading on a firmer footing as both price and the Relative Strength Index (RSI) break out of the bearish trends carried over from September.

GBP/USD Daily Chart

GBP/USD Daily Chart
  • GBP/USD may continue to pare the decline from the previous week following the failed attempt to test the October-low (1.3027), with a close back above the 1.3090 (38.2% retracement) to 1.3120 (78.6% retracement) raising the risk for a run at the top of the current range.
  • First topside hurdle comes in around 1.3210 (50% retracement), with the near-term outlook capped by the Fibonacci overlap around 1.3300 (100% expansion) to 1.3320 (38.2% retracement); next topside hurdle comes in around 1.3370 (78.6% expansion), which sits just below the October-high (1.3402).
EUR/USD

EUR/USD remains vulnerable to further losses with a slew of European Central Bank (ECB) official schedule to speak over the coming days, and a batch of dovish rhetoric may produce headwinds for the single-currency as President Mario Draghi and Co. plan to carry the quantitative easing (QE) program into 2018.

Fresh remarks from ECB board member Peter Praet suggest the central bank will endorse a cautious tone ahead of its last 2017 meeting on December 14 as the Governing Council official argues ‘a substantial amount of monetary accommodation continues to be necessary to secure the gradual convergence of inflation towards our inflation aim.’ With that said, the President Draghi and Co. may keep the door open to further support the monetary union as the ‘net asset purchases are intended to continue at a monthly pace of €30 billion until the end of September 2018, or beyond, if necessary,’ and EUR/USD may continue to give back the advance from earlier this year as a head-and-shoulders formation continues to unfold.

EUR/USD Daily Chart

EUR/USD Daily Chart
  • Downside targets remain on the radar for EUR/USD as it struggles to push back above the neckline around 1.1670 (50% retracement), with both price and the Relative Strength Index (RSI) still preserving the bearish formations carried over from the summer months.
  • With EUR/USD quickly approaching the October-low (1.1574), a break/close below the 1.1580 (100% expansion) hurdle raises the risk for a move back towards the Fibonacci overlap around 1.1480 (78.6% expansion) to 1.1500 (78.6% expansion), with the next region of interest coming in around 1.1390 (61.8% retracement) to 1.1400 (61.8% expansion).

New to Forex? Download the DailyFX Beginners Guide to Start Building a Basic Strategy!

DailyFX Calendar

Click Here for the DailyFX Calendar

Want More Insight? Join DailyFX Currency Analyst David Song LIVE for an Opportunity to Cover Key Market Themes Along with Potential Trade Setups.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

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

DISCLOSURES