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  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/qtAmyhFU9A
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/H19vRDCpUJ https://t.co/S74APOiQ3y
  • Two of the main Euro-pairs, $EURUSD and $EURGBP, are being driven by very different drivers. Get your market update from @nickcawley1 here: https://t.co/Vd32Y6HKEr https://t.co/Lgb5z5V1Xa
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/9uPXNvDBS5
  • We ended this past week with another cliffhanger. The $SPX teeters on the edge of a breakdown from the post-pandemic recovery. While we have NFPs and other key data ahead, the markets are likely to remain fixated on yields. My outlook for next week: https://www.dailyfx.com/forex/video/daily_news_report/2021/02/27/SP-500-Dollar-Reversal-Hinge-Not-On-NFPs-but-Markets-Risk-Imagination.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/mlNDDyTgex
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  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/SyroornFf5
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4QhQGQ6 https://t.co/KrMcyZZqO7
  • The Reserve Bank of Australia (RBA) rate decision may spark a bullish reaction in $AUDUSD as the central bank is expected to retain the current course for monetary policy. Get your market update from @DavidJSong here: https://t.co/WbcR9ER0qT https://t.co/TynsqCtPQ6
  • Gold has broken below a critical support confluence we’ve been tracking for months now and the risk remains for further losses while below this threshold in the weeks ahead. Get your $XAUUSD market update from @MBForex here:https://t.co/xgN2obaIWR https://t.co/H71ufPNkPg
Upbeat 4Q Euro-Zone GDP Report to Curb EUR/USD Weakness

Upbeat 4Q Euro-Zone GDP Report to Curb EUR/USD Weakness

David Song, Strategist

FX Talking Points:

- USD/CAD RSI Divergence Takes Shape Ahead of Month-End Trade.

- Upbeat 4Q Euro-Zone GDP Report to Curb EUR/USD Weakness.

DailyFX TableUSD/CAD Table

USD/CAD may face range-bound conditions going into the end of the month as market attention turns to the Federal Open Market Committee (FOMC) interest rate decision on January 31.

The fresh remarks from FOMC may sway the near-term outlook for USD/CAD as the committee appears to be on track to further normalize monetary policy over the coming months, and Fed officials may prepare U.S. households and businesses for a March rate-hike as most participants support ‘a gradual approach to raising the target range.’ In turn, a hawkish policy statement may spur a bullish reaction in dollar-loonie, with the pair at risk of staging a near-term rebound especially as the Bank of Canada (BoC) implements a dovish-rate hike at its first meeting for 2018.

Keep in mind, the broader outlook for USD/CAD remains tilted to the downside as the pair snaps the range from earlier this month, while the Relative Strength Index (RSI) continues to track the bearish formation carried over from November, but thenear-term outlook remains clouded with mixed signals as the Relative Strength Index (RSI) persistently holds above 30 even as the exchange rate sits near the monthly-low (1.2282).

USD/CAD Daily Chart

USD/CAD Daily Chart

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  • Recent price action highlights the risk for a more meaningful rebound in USD/CAD as the pair snaps the string of lower-lows from earlier this month following the series of failed attempts to test the 1.2210 (50% expansion) to 1.2250 (50% retracement).
  • Keeping a close eye on the RSI as it hold above oversold territory and appears to be deviating with price; first topside region of interest comes in around 1.2440 (23.6% expansion) to 1.2510 (78.6% retracement) followed by the former-support zone around 1.2620 (50% retracement).
EUR/USD Table

EUR/USD continues to pullback from the 2018-high (1.2537), but the fresh developments coming out of the monetary union may curb the recent weakness in EUR/USD as the 4Q Euro-Zone Gross Domestic Product (GDP) report is anticipated to show an uptick in the growth rate.

The euro-area is expected to grow an annualized 2.7 % after expanding 2.6% during the three-months through September, and an upbeat GDP print may heighten the appeal of the single-currency as it encourages the European Central Bank (ECB) to move away from its easing-cycle.

In response, the Governing Council may continue to prepare European households and businesses for a less-accommodative stance as ‘incoming information confirms a robust pace of economic expansion, which accelerated more than expected in the second half of 2017,’ and the change in the euro-area monetary policy outlook may continue to fuel the broader shift in EUR/USD behavior as the ECB appears to be on track to conclude the quantitative easing (QE) program in September.

Keep in mind, recent remarks from ECB officials suggest the central bank will try to jawbone the single-currency as ‘the recent volatility in the exchange rate represents a source of uncertainty,’ with recent price action warns of a near-term pullback in the euro-dollar exchange rate as the bullish momentum carried over from late last year appears to be getting exhausted. Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

EUR/USD Daily Chart

EUR/USD Daily Chart

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  • Will continue to watch the topside targets for EUR/USD as long as the Relative Strength Index (RSI) holds above 70, but still waiting for a close above 1.2430 (50% expansion) to open up the next topside hurdle around 1.2640 (61.8% expansion) to 1.2650 (38.2% retracement).
  • Broader outlook for EUR/USD remains constructive as both price and the RSI extend the bullish formations from late last year, with the next area of interest coming in around 1.2860 (50% expansion) to 1.2930 (78.6% expansion).
  • Need to keep a close eye on the RSI as it appears to be flattening out, with the oscillator at risk of flashing a textbook sell-signal if it slips below 70.
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--- Written by David Song, Currency Analyst

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

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

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