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
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
More View more
Real Time News
  • Feels like the market has been front-running next week’s FOMC announcement, which will reveal updated dot plot projections. Expectations clearly set for a more hawkish shift in guidance. That said, if the Fed does not deliver, US Dollar bulls could be disappointed. $USD $DXY https://t.co/o2v6ibac3L
  • USD/CAD has been chopping around the past week-and-a-half, offering virtually no cues on its next direction. Get your market update from @PaulRobinsonFX here:https://t.co/eq1YkOa3mC https://t.co/V6h8BjyeGa
  • FDA panel votes 16-3 against approving Covid-19 booster shots - BBG
  • RT @C_Barraud: 🇺🇸 Americans Haven’t Been This Down on #Housing Market Since 1982 - Bloomberg *Link: https://t.co/wWFnbAwIDO https://t.co/6G…
  • US Dollar Price Action Setups Pre-FOMC: EUR/USD, GBP/USD, USD/CAD https://www.dailyfx.com/forex/analyst_picks/todays_picks/james_stanley/2021/09/17/US-Dollar-Price-Action-Setups-pre-FOMC-EURUSD-EUR-USD-GBP-USD-GBPUSD-USD-CAD-USDCAD.html https://t.co/J25MYsXCa9
  • The US Dollar is pushing up to a fresh September high after the release of University of Michigan Consumer Sentiment data. Get your $USD market update from @JStanleyFX here:https://t.co/2CDNZh2a89 https://t.co/bULXuCaHKk
  • I have this $SPX chart taking over one of my whole screens, and I just keep staring at that 50-day moving average... https://t.co/R9LQAuL2DL
  • RT @TheStalwart: Nice chart, which shows why countries in green on the perimeter, like Iran, Peru, and Turkey are known for their stability…
  • Selling pressure strengthening in Wall Street two hours before the close. S&P 500 down roughly 1% intraday, the largest decline since August 18th #trading $SPX $SPY
  • One of the strongest correlation with Bitcoin at the moment is the US 10-Year Treasury yield https://t.co/uZBzJ7yiXf
EUR/USD Snaps Monthly Opening Range After Failing to Clear July High

EUR/USD Snaps Monthly Opening Range After Failing to Clear July High

David Song, Strategist

EUR/USD Rate Talking Points

EUR/USD extends the rebound from a fresh monthly low (1.1770) amid the larger-than-expected slowdown in the US Consumer Price Index (CPI), but recent price action casts a bearish outlook for the exchange rate as it snaps the opening range for September.

Advertisement

EUR/USD Snaps Monthly Opening Range After Failing to Clear July High

EUR/USD appears to have reversed course after failing to clear the July high (1.1909), with the exchange rate dipping below the 50-Day SMA (1.1799) at the start of the week even as the European Central Bank (ECB) plans to carry out the pandemic emergency purchase programme (PEPP) at a “moderately lower pace.”

It seems as though the ECB is in no rush to normalize monetary policy as the central bank reiterates that the PEPP will operate “with a total envelope of €1,850 billion until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over,” and the Euro may face headwinds ahead of the Federal Open Market Committee (FOMC) interest rate decision on September 22 as Chairman Jerome Powell and Co. show a greater willingness to switch gears.

Until then, speculation surrounding the ECB and FOMC may sway EUR/USD as both central banks maintain an outcome-based approach for monetary policy, but a further decline in the exchange rate may fuel the recent flip in retail sentiment like the behavior seen earlier this year.

Image of IG Client Sentiment for EUR/USD rate

The IG Client Sentiment report shows 50.70% of traders are currently net-long EUR/USD, with the ratio of traders long to short standing at 1.03 to 1.

The number of traders net-long is 4.30% higher than yesterday and 22.23% higher from last week, while the number of traders net-short is 0.89% lower than yesterday and 19.70% lower from last week. The rise in net-long interest has led to a flip in retail sentiment as 42.07% of traders were net-long EUR/USD last week, while the decline in net-short position comes as EUR/USD snaps the opening range for September.

With that said, EUR/USD may struggle to hold above the 50-Day SMA (1.1799) amid the failed attempt to clear the July high (1.1909), and the rebound from the August low (1.1664) may turn out to be a correction in the broader trend as the exchange rate trades to fresh yearly lows in the second half of 2021.

{{GUIDE|SENTIMENT_GUIDE| Learn More About the IG Client Sentiment Report}

EUR/USD Rate Daily Chart

Image of EUR/USD rate daily chart

Source: Trading View

  • Keep in mind, EUR/USD sits below the 200-Day SMA (1.1994) for the first time since April as the advance from the March low (1.1704) failed to produce a test of the January high (1.2350), with the exchange rate trading to a fresh yearly low (1.1664) in August as the 50-Day SMA (1.1799) established a negative slope.
  • As a result, the advance from the August low (1.1664) may turn out to be a correction in the broader trend as EUR/USD appears to have reversed course following the failed attempt to clear the July high (1.1909), but need a close below the 1.1780 (23.6% expansion) to 1.1810 (61.8% retracement) region to open up the Fibonacci overlap around 1.1670 (78.6% expansion) to 1.1710 (61.8% retracement).
  • A break of the August low (1.1664) brings the 1.1640 (50% expansion) region on the radar, with the next area of interest coming around 1.1580 (61.8% 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