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
EUR/USD
Bullish
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
Oil - US Crude
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
Wall Street
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
Gold
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
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • webinar time... https://www.dailyfx.com/webinars/455809179 topics up for discussion today: 1) USD - do something 2) Stocks supported on stimulus hopes 3) Crosses cleaning up a bit? starting right meow https://www.dailyfx.com/webinars/455809179 https://t.co/zj9XN14BDv
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.82%, while traders in EUR/USD are at opposite extremes with 72.47%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/qMPdBfUArS
  • Heads Up:🇺🇸 Fed Evans Speech due at 17:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-20
  • House Speaker Nancy Pelosi: -Optimistic for stimulus deal -Trump administration has come a long way toward reaching an agreement -Want to crush the virus -Need to improve health care language on stimulus bill -Will speak with Treasury Secretary Steven Mnuchin today at 3PM ET
  • Netflix earnings is due after the close today. Despite its being a vaunted FAANG member, I think it will draw less attention than tomorrow's Tesla update which has worked its way even higher into the speculative echelon. Personally, I put more on CSX as a reflection of economy.
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Silver: 1.27% Oil - US Crude: 0.31% Gold: 0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/pLRpke3JAJ
  • The bull market in gold has been in correction mode since it peaked in early August, and while it appears is a healthy retracement at this juncture, it is unclear just how much longer it will last. Get your $XAUUSD technical analysis from @PaulRobinsonFX :https://t.co/5etzhvsLuC https://t.co/aE7SaPPwih
  • $SPX bull flag + 38.2 retrace of the sep-oct major move $SPY $ES https://t.co/NbehE85NQc
  • Hey traders! Get your Tuesday market update from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/x2Db7s11Cz
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.53% 🇪🇺EUR: 0.49% 🇨🇭CHF: 0.34% 🇯🇵JPY: -0.13% 🇦🇺AUD: -0.17% 🇳🇿NZD: -0.35% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Yql52APvbV
EURUSD Rebound Unravels as Fed Tames Bets for Rate Easing Cycle

EURUSD Rebound Unravels as Fed Tames Bets for Rate Easing Cycle

2019-08-15 00:30:00
David Song, Strategist
Share:

EUR/USD Rate Talking Points

EURUSD snaps the range bound price action from earlier this week even though US President Donald Trump tweets that the Federal Reserve is “too slow to cut,” and the exchange rate may continue to consolidate over the coming days as the Federal Open Market Committee (FOMC) tames speculation for a rate easing cycle.

EURUSD Rebound Unravels as Fed Tames Bets for Rate Easing Cycle

Fresh data prints coming out of the euro-area generated a limited reaction in EURUSD, but the updates to the Gross Domestic Product (GDP) report should keep the European Central Bank (ECB) on the sidelines as the growth rate climbs 0.2% q/q in the second quarter of 2019.

In contrast, the Federal Reserve may come under increased pressure to implement lower interest rates as President Trump insists that “the Fed is holding us back,” and it remains to be seen if the FOMC will reverse the four rate hikes from 2018 as the commander in chief goes on to say that “our economy is strong.”

However, fresh remarks from St. Louis Fed President James Bullard, a 2019 voting member on the FOMC, suggests the central bank is in no rush to implement a rate easing cycle as “macroeconomic outcomes are quite good for the United States.”

Image of Fed Fund futures

Keep in mind, Fed Fund futures still reflect a 100% probability for at least a 25bp reduction on September 18, but Fed officials may continue to tame bets for a rate easing cycle as “the economy’s not in recession.”

In turn, the FOMC may attempt to buy more time as the Trump administration delays a portion of the next tranche of China tariffs to December 15, and the central bank may largely endorse a wait-and-see approach ahead of the next meeting as Mr. Bullard argues that “it’s actually a good time to do strategic thinking for the future.”

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss key themes and potential trade setups surrounding foreign exchange markets.

EUR/USD Rate Daily Chart

Image of eurusd daily chart
  • The broader outlook for EURUSD is clouded with mixed signals as the exchange rate clears the May-low (1.1107) following the FOMC rate cut in July, with the 1.1100 (78.6% expansion) handle no longer offering support.
  • The Relative Strength Index (RSI) highlights a similar dynamic as the oscillator fails to retain the bullish formation from earlier this year.
  • At the same time, the rebound from the monthly-low (1.1027) appears to have stalled following the string of failed attempts to close above the Fibonacci overlap around 1.1190 (38.2% retracement) to 1.1220 (78.6% retracement).
  • Lack of momentum to hold above the 1.1140 (78.6% expansion) region raises the risk for a move towards the 1.1100 (78.6% expansion) handle, with the next area of interest coming in around 1.1040 (61.8% expansion).

For more in-depth analysis, check out the 3Q 2019 Forecast for Euro

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 markets the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES