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.

Free Trading Guides
EUR/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
GBP/USD
Mixed
USD/JPY
Bearish
Gold
Bearish
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • - #USDollar eyes #Powell second Congressional testimony - What were some of the key takeaways from his outlook? - Stock markets cautiously eye shaky US-China #trade talks https://www.dailyfx.com/forex/fundamental/article/special_report/2019/11/14/US-Dollar-Stocks-Eye-Powell-Testimony-as-Trade-Talks-Stumble.html https://t.co/gKJr3DpVOO
  • AUD/USD, USD/CAD, EUR/USD Price Trend Outlook in Positioning $AUDUSD $USDCAD $EURUSD - https://www.dailyfx.com/forex/fundamental/article/special_report/2019/11/14/AUDUSD-USDCAD-EURUSD-Price-Trend-Outlook-in-Positioning.html?CHID=9&QPID=917702 https://t.co/1i334MvltQ
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.56%, while traders in France 40 are at opposite extremes with 85.94%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/cCz4harA5v
  • My trade video for today: ' Dow and Emerging Market Divergence a Warning, Trade Wars Outshine Powell Testimony' https://www.dailyfx.com/forex/video/daily_news_report/2019/11/14/Dow-and-Emerging-Market-Divergence-a-Warning-Trade-Wars-Outshine-Powell-Testimony.html?CHID=9&QPID=917719 https://t.co/ktgLIKeW5s
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.10% 🇨🇭CHF: -0.01% 🇨🇦CAD: -0.09% 🇬🇧GBP: -0.13% 🇳🇿NZD: -0.34% 🇦🇺AUD: -0.60% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/qc85e1c3xH
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.09% France 40: 0.03% Wall Street: 0.02% US 500: -0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/NUCz05xYNI
  • The $AUD appears to have resumed the dominant downtrend against its US counterpart after breaking support set from October lows. Get your $AUDUSD market update from @IlyaSpivak here:https://t.co/DW5oWIuMaX https://t.co/RYoyvGvkOd
  • Since late July, the economic news flow from Australia has been increasingly out-performing relative to economists’ expectations. -Citi #AUD
  • 🇯🇵 JPY Tertiary Industry Index (MoM) (SEP), Actual: 1.8% Expected: 1.1% Previous: 0.3% https://www.dailyfx.com/economic-calendar#2019-11-14
  • Trade deal bets kept the Singapore Dollar, Philippine Peso, Indonesian Rupiah and Malaysian Ringgit afloat despite $USD strength. This is the key fundamental driver for #ASEAN FX.Get your market update from @ddubrovskyFX here: https://t.co/aB8qP3JsB4 https://t.co/lLPkHZkj4n
EUR/USD Rate Risks Larger Rebound as U.S. GDP Forecast Deteriorates

EUR/USD Rate Risks Larger Rebound as U.S. GDP Forecast Deteriorates

2019-03-12 22:00:00
David Song, Currency Strategist
Share:

Euro Talking Points

EUR/USD continues to retrace the sharp selloff following the European Central Bank (ECB) meeting as U.S. data prints point to a slowing a economy, and the exchange rate may stage a larger rebound over the coming days as it initiates a string of higher highs & lows.

Image of daily change for major currencies

EUR/USD Rate Risks Larger Rebound as U.S. GDP Forecast Deteriorates

Image of daily change for eurusd rate

EUR/USD extends the advance from earlier this week as the U.S. Consumer Price Index (CPI) unexpectedly narrows to 1.5% from 1.6% per annum in January, with the core rate of inflation highlighting a similar dynamic as the gauge slips to 2.1% from 2.2% during the same period.

Image of DailyFX economic calendar

Looking ahead, updates to the U.S. Durable Goods Orders report may also produce a bearish reaction in the U.S. dollar as demand for large-ticket items are expected to contract 0.4% in February, while Non-Defense Capital Goods Orders excluding Aircrafts, a proxy for business investment, are projected to fall 0.2% after holding flat the month prior.

Image of Atlanta Fed GDP Now forecast

As a result, the Atlanta Fed’s ‘GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2019 is 0.2 percent on March 11, down from 0.5 percent on March 8,’ and the Federal Open Market Committee (FOMC) may continue to alter the forward-guidance at the next interest rate decision on March 20 as ‘some risks to the downside had increased, including the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market condition.’

Image of fed summary of economic projections

It seems as though the FOMC has long but abandoned the hiking-cycle as the central bank prepares to taper the $50B/month in quantitative tightening (QT), with Chairman Jerome Powell asserting that ‘the Committee can now evaluate the appropriate timing and approach for the end of balance sheet runoff’ as Fed officials lower their forecast for growth and inflation. It remains to be seen if there will be a further adjustment to the Summary of Economic Projections (SEP) as the previous update still indicate a longer-run interest rate of 2.75% to 3.00%, and a material change it the Fed forecasts are likely to impact the near-term outlook for the U.S. dollar as the central bank drops the hawkish forward-guidance for monetary policy.

With that said, developments coming out of the U.S. economy may continue to drag on the greenback, with EUR/USD at risk for a larger rebound as the exchange rate retraces the selloff following the ECB meeting. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups ahead of the ECB meeting.

EUR/USD Daily Chart

Image of eurusd daily chart
  • Keep in mind, the broader outlook for EUR/USD remains tilted to the downside as it clears the 2018-low (1.1216), but the failed attempt to close below the Fibonacci overlap around 1.1190 (38.2% retracement) to 1.1220 (7.86% retracement) may generate a larger rebound especially as the exchange rate initiates a fresh series of higher highs & lows.
  • A close back above the 1.1270 (59% expansion) to 1.1290 (61.8% expansion) region) raises the risk for a move towards 1.1340 (38.2% expansion), with the next region of interest coming in around 1.1390 (61.8% retracement) to 1.1400 (50% expansion).
  • Will keep a close eye on the Relative Strength Index (RSI) as it reverses course ahead oversold territory and now approaches trendline resistance.

For more in-depth analysis, check out the 1Q 2019 Forecast for EUR/USD

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- 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.

DISCLOSURES

News & Analysis at your fingertips.