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
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
More View more
Real Time News
  • Airline stocks retracing losses, some already in positive territory, despite the large sell-off in the market. News that the US will overhaul its COVID-19 travel rules and lift some restrictions are good news for the airline industry $JETS $UAL $AAL $ALK
  • The S&P 500 have taken a clear dive to start the week and fear of full risk aversion is gaining traction. DailyFX's @JohnKicklighter discusses what to expect in the markets this week! https://t.co/Mlyp5Tbdax
  • $USD still pulling back from resistance. 93.43 was the Q1 swing high, still playing a role in $DXY support potential around prior res, ~93.20 https://t.co/3TnlEu0yZX https://t.co/ub8o4D8NhW
  • despite the theatrics elsewhere, $Gold has held last week's low through this week's open, at least so far even getting a bump higher. resistance potential 1769-1775 $GC $GLD https://t.co/4mbBa8Yzhu
  • While there is no doubt a risk aversion wave at play now, it can still burn itself out with years of complacency and the expectations of Fed on Wed (anticipation can take the wind out of sails). But if/when the Dollar takes off pre-FOMC, that would be. https://t.co/3qFNBQEEA3
  • Bitcoin probing Fibo support zone ~42,588 #Bitcoin $BTCUSD https://t.co/f5XeSk5VDY https://t.co/zKDRps62Id
  • EUR/USD extends the series of lower highs and lows from the previous week as European Central Bank (ECB) officials defend the dovish forward guidance for monetary policy. Get your $EURUSD market update from @DavidJSong here:https://t.co/4dgXe9lMik https://t.co/5CkSsQKawh
  • There are reasonable disputes over where technical boundaries exist from people with different views, charts, time frames, etc. I think this $SPX gap down and drive below the 50-day SMA clearly qualifies as a break https://t.co/M15HsOyvoG
  • Some people like a quiet market that edges higher consistently day in and day out. I am not one of those people. I like volatility
  • 🇺🇸 NAHB Housing Market Index (SEP) Actual: 76 Expected: 74 Previous: 75 https://www.dailyfx.com/economic-calendar#2021-09-20
EUR/USD Breakout Following ECB Meeting Brings April High on the Radar

EUR/USD Breakout Following ECB Meeting Brings April High on the Radar

David Song, Strategist

EUR/USD Rate Talking Points

EUR/USD trades to a fresh weekly high (1.0973) as the European Central Bank (ECB) sticks to its zero interest rate policy (ZIRP), and the exchange rate may continue to retrace the decline from the April high (1.1039) as it breaks out of a narrow range.

EUR/USD Rate Outlook Hinges on Euro Area 1Q GDP Report & ECB Meeting

EUR/USD extends the advance from the April low (1.0727) even though the ECB unveils a new series of non-targeted pandemic emergency longer-term refinancing operations (PELTROs) as the central bank remains reluctant to push the main refinance rate, the benchmark for borrowing costs, into negative territory.

Image of ECB interest rate decisions

Source: ECB

It seems as though the ECB will rely on its non-standard measures to support the monetary union as the Governing Council also plans to “reduce the interest rate on TLTRO III (Targeted Longer-Term Refinancing Operations) operations during the period from June 2020 to June 2021 to 50 basis points below the average interest rate on the Eurosystem’s main refinancing operations.”

The economic shock from COVID-19 may force the Governing Council to deploy more unconventional tools as the “growth scenarios produced by ECB staff suggest that euro area GDP could fall by between 5% and 12% this year, depending crucially on the duration of the containment measures,” and President Christine Lagarde and Co. may continue to push monetary policy into uncharted territory as the central bank pledges to “adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner.”

However, President Lagarde insists that “continued and ambitious efforts are needed, notably through joint and coordinated policy action, to guard against downside risks and to underpin the recovery,” and ECB officials may call upon European lawmakers to provide additional fiscal support as “the Governing Council urges further strong and timely efforts to prepare and support the recovery.”

With that said, the ECB may continue to utilize its unconventional tools as the central bank remains “fully prepared to increase the size of the PEPP (Pandemic Emergency Purchase Programme) and adjust its composition, by as much as necessary and for as long as needed,” and the Euro may face headwinds throughout 2020 as the central bank retains a dovish forward guidance for monetary policy.

Nevertheless, it remains to be seen if the Governing Council will unveil more non-standard measures ahead of the next meeting on June 4 as European Council President Charles Michel plans to make the EUR 540B stimulus package available by June, and EUR/USD may continue to retrace the decline from the April high (1.1039) as it breaks out of a narrow range.

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 EUR/USD rate daily chart

Source: Trading View

  • Keep in mind, the monthly opening range has been a key dynamic for EUR/USD in the fourth quarter of 2019 as the exchange rate carved a major low on October 1, with the high for November occurring during the first full week of the month, while the low for December happened on the first day of the month.
  • The opening range for 2020 showed a similar scenario as EUR/USD marked the high of the month on January 2, with the exchange rate carving the February high during the first trading day of the month.
  • However, the opening range for March was less relevant amid the pickup in volatility, with the pullback from the yearly high (1.1495) producing a break of the February low (1.0778) as the exchange rate slipped to a fresh 2020 low (1.0636).
  • Nevertheless, EUR/USD may trade within a more defined range over the coming days as the decline from the April high (1.1039) failed to produce a test of the yearly low (1.0636), and the rebound from the April low (1.0727) may gather pace as the exchange rate breaks out of a narrow range.
  • Need a break/close above the Fibonacci overlap around 1.0950 (100% expansion) to 1.0980 (78.6% retracement) to bring the 1.1040 (61.8% expansion) region on the radar, which largely lines up with the April high (1.1039), with the next area of interest coming in around 1.1100 (78.6% expansion) to 1.1140 (78.6% expansion).

--- 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