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
Subscribe
Please try again
EUR/USD
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
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
Bearish
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkzWwW https://t.co/9j004hyzUZ
  • Learning how to trade does not have to feel foreign. Hone your skills and build your confidence with free DailyFX guides today! https://t.co/lnxaQOsgid https://t.co/7myL4vGnt8
  • Using margin in forex trading is a new concept for many traders, and one that is often misunderstood. Margin is the minimum amount of money required to place a leveraged trade and can be a useful risk management tool. Learn about margin trading here: https://t.co/qZCE5asCzM https://t.co/yxE0OmLIP0
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/1mnOXUd00T https://t.co/iSrjZTeWwf
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/WeLInepZiD https://t.co/7B0KI8HehW
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM73cHA https://t.co/vGW5BygTXU
  • When it comes to buying and selling forex, traders have unique styles and approaches. Learn about buying and selling forex here: https://t.co/xngExEdFdu https://t.co/kqpJ6oGXgt
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/F4dXbUzU3o https://t.co/G0ZWWVtSrZ
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfIZNKr https://t.co/5js6tWk5bY
  • The Euro has regained lost ground against its major counterparts recently. Are further gains in the offing or is this just a short-term countertrend correction? EUR/USD, EUR/JPY, EUR/GBP, EUR/NZD key levels. Get your market update from @DanielGMoss here:https://t.co/Z71MZEIJWC https://t.co/YAr1kN4eKd
EUR/USD Rate Outlook Hinges on ECB Interest Rate Decision

EUR/USD Rate Outlook Hinges on ECB Interest Rate Decision

David Song, Strategist

EUR/USD Rate Talking Points

EUR/USD continues to pullback from the yearly high (1.2011) following the kneejerk reaction to the US Non-Farm Payrolls (NFP) report, but the European Central Bank (ECB) interest rate decision on September 10 may influence the exchange rate if the Governing Council tames speculation for additional monetary support.

EUR/USD Rate Outlook Hinges on ECB Interest Rate Decision

EUR/USD approaches the monthly low (1.1781) as ECB Chief Economist Philip Lane warns that the Euro’s “repricing in recent weeks” may hamper the central bank from achieving its inflation mandate, and the Governing Council may continue to endorse a dovish forward guidance as the central bank stands “ready to adjust all of its instruments, as appropriate, to ensure that inflation moved towards its aim in a sustained manner.”

However, it seems as though President Christine Lagarde and Co. are in no rush to deploy more unconventional measures as the European Union (EU) plans to make the EUR 750B Recovery Fund available from 2021 to 2023, and the updated staff projections may indicate a wait-and-see approach for monetary policy as the account of the July meeting emphasizes that the EUR 1.350 trillion envelope for the pandemic emergency purchase programme (PEPP) “should be considered a ceiling rather than a target.”

In turn, the ECB may stick to the same script as board member Isabel Schnabel insists that “there is no reason to adjust the monetary policy stance” while the Euro Area operates near the baseline scenario, and more of the same from the Governing Council may prop up EUR/USD as the Federal Reserve appears to be on track to utilize its emergency tools throughout the remainder of the year.

Until then, EUR/USD may remain under pressure as the Relative Strength Index (RSI) extends the downward trend carried over from the end of July, but the recent weakness may prove to be an exhaustion in the bullish behavior rather than a change in trend as the exchange rate trades to fresh yearly high (0.6789) in September.

In fact, current market trends may continue to influence EUR/USD as the crowding behavior in the US Dollar carries into September, with retail traders net-short the pair since mid-May.

Image of IG Client Sentiment for EUR/USD rate

The IG Client Sentiment report shows 43.83% of traders are net-long EUR/USD, with the ratio of traders short to long at 1.28 to 1. The number of traders net-long is 17.42% higher than yesterday and 46.26% higher from last week, while the number of traders net-short is 4.51% higher than yesterday and 10.11% lower from last week.

The rise in net-long position has helped to alleviate the tilt in retail sentiment as only 41.63% of traders were net-long EUR/USD last week, but the recent pick up in net-short interest suggests the crowding behavior will persist even though the Federal Reserve’s balance sheet climbs back above $7 trillion in August.

With that said, EUR/USD may face a larger pullback ahead of the ECB meeting as the RSI continues to track a downward trend, but current market trends may keep the exchange rate afloat as it tags a fresh 2020 high (1.2011) in September.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by David Song
Learn More About the IG Client Sentiment Report
Get My Guide

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, a ‘golden cross’ materialized in EUR/USD towards the end of June as the 50-Day SMA (1.1670) crossed above the 200-Day SMA (1.1191), with the moving averages extending the positive slopes into the second half of the year.
  • At the same time, a bull flag formation panned out following the failed attempt to close below the 1.1190 (38.2% retracement) to 1.1220 (78.6% expansion) region in July, with the Relative Strength Index (RSI) helping to validate the continuation pattern as the oscillator bounced along trendline support to preserve the upward trend from March.
  • However, the EUR/USD rally stalled following the failed attempt to close above the 1.1960 (38.2% retracement) to 1.1970 (23.6% expansion) region, with the RSI highlighting a similar dynamic as it slipped below 70 to flash a textbook sell signal.
  • A similar scenario appears to have materialized in September as EUR/USD approaches the approaches the monthly low (1.1781) after staging another failed attempt to close above the 1.1960 (38.2% retracement) to 1.1970 (23.6% expansion) region.
  • EUR/USD may face a larger pullback as the RSI reverses from trendline resistance to preserve the bearish formation carried over from the end of July, with a closing price below the 1.1810 (61.8% retracement) to 1.1850 (100% expansion) region opening up the Fibonacci overlap around 1.1670 (50% retracement) to 1.1710 (61.8% retracement), which lines up with the August low (1.1696).
  • Nevertheless, future developments in the RSI may help to validate a near-term breakout in EUR/USD once the indicator takes out the downward trend, with a move above 70 likely to be accompanied by a further appreciation in the exchange rate like the behavior seen in July.
  • Need a close above the 1.1960 (38.2% retracement) to 1.1970 (23.6% expansion) region to bring the May 2018 high (1.1996) on the radar, with the next area of interest coming in around 1.2080 (78.6% retracement) to 1.2140 (50% retracement).
Traits of Successful Traders
Traits of Successful Traders
Recommended by David Song
Traits of Successful Traders
Get My Guide

--- 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