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  • USD/JPY strengthening during trade, adding to an impressive run for the Dollar/Yen pair in 2021 https://t.co/xHRuS8D2i0
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Silver: -0.21% Oil - US Crude: -0.21% Gold: -1.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4hoyPt34ex
  • The latest CFTC positioning data for the week ending March 2nd saw speculators continue to unwind their US Dollar net shorts. Get your market update from @JMcQueenFX here:https://t.co/S3Kx4OBphE https://t.co/fejOV0AXYv
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.43%, while traders in Germany 30 are at opposite extremes with 80.92%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/klgOuNPYtk
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Wall Street: 1.45% US 500: 0.20% France 40: -0.10% Germany 30: -0.25% FTSE 100: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/umSIPmSxrY
  • $EURCAD has continued to head lower today, now trading right around the 1.5000 level. The pair hit a fresh one-year low, currently trading at its lowest level since early March of last year. $EUR $CAD https://t.co/Oj9JYasyTU
  • US Indices are rebounding from last week's sell off today. The Dow is leading the way, rising to a fresh all-time high. The Nasdaq remains negative for the day. DOW +2.00% NDX -0.55% SPX +0.91% RUT +1.70% $DIA $QQQ $SPY $IWM
  • Another look at the deviation in 'internal' interest in US equities: the candle is the Nasdaq 100 to S&P 500 ratio ($NDX-$SPX) overlaid with the S&P 500 itself in blue https://t.co/m2WK4Q2Bs5
  • A notable deviation in direction from the tech-heavy Nadex composite (candle) overlaid with the S&P 500 in blue. The 5-day correlation is still holding up but will start deviating fast at this pace https://t.co/VYY5imk1yS
  • $USD has been pretty strong over the past couple of weeks and to a lesser degree, so far in 2021 but we've only retraced about 23.6% of that massive sell-off that started last March $DXY https://t.co/t5KRSYu0TP
EUR/USD Rate Carves Holding Pattern Within Bearish Trend

EUR/USD Rate Carves Holding Pattern Within Bearish Trend

David Song, Strategist

Euro Talking Points

EUR/USD pares the decline from the previous week even as the European Central Bank (ECB) strikes a dovish outlook for monetary policy, and euro-dollar may continue to consolidate over the coming days as the exchange rate appears to be stuck in a near-term holding pattern.

Image of daily change for major currencies

EUR/USD Rate Carves Holding Pattern Within Bearish Trend

Image of daily change for EURUSD

Headlines arising from the European Union (EU) Summit in Brussels suggest the ECB will continue to strike a dovish outlook for monetary policy as President Mario Draghi warns that a trade war may have a larger-than-anticipated impact on the euro-area economy, and the central bank may keep the door open to further support the monetary union as the quantitative easing (QE) program is now set to expire in December.

At the same time, the updates to the Euro-Zone Consumer Price Index (CPI) should keep the Governing Council on the sidelines as the core reading narrows to an annualized 1.0% from 1.1% in May, and the developments may encourage the ECB to merely buy more time at the next meeting on July 26 as the central bank struggles to achieve its one and only mandate for price stability.

Looking ahead, Governing Council members Peter Praet, Yves Mersch, Ewald Nowotny, Daniele Nouy and Jens Weidmann are all scheduled to speak next week, and more of the same from the ECB officials may tame the recent rebound in EUR/USD especially as the central bank appears to be on track to carry the zero-interest rate policy (ZIRP) well into 2019.

EUR/USD Daily Chart

Image of EURUSD daily chart
  • Keep in mind, EUR/USD appears to be carving a triangle/wedge formation within a bearish trend, and the failed attempts to test the monthly-high (1.1852) keeps the path of least resistance tilted to the downside.
  • Need a break/close below the 1.1500 (38.2% expansion) handle to open up the downside targets as both price and the Relative Strength Index (RSI) extend the bearish formations carried over from earlier this year.
  • First downside region of interest comes in around 1.1390 (61.8% retracement) to 1.1400 (50% expansion) followed by the 1.1290 (61.8% expansion) hurdle.

For more in-depth analysis, check out the Q2 Forecast for the Euro

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--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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

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