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The Bank of England and European Central Bank left little collateral damage in their respective wakes this morning, with GBP/USD trading in an approximate 30-pip range and EUR/USD trading in an approximate 50-pip range this morning following the policy decisions. Neither central bank appears to be having much influence over Euro or the Sterling, given that neither central bank is expected to make any changes before September 2018 at the earliest. The US Dollar, hit after yesterday’s FOMC meeting, has clawed back some of its losses as a result.

DailyFX Economic Calendar: Thursday, December 14, 2017 – North American Releases

DailyFX US AM Digest: Euro and Pound Ease off after ECB and BOE

The North American economic calendar is supersaturated on Thursday, with the Banxico policy meeting capping things off at 14 EST/19 GMT. Mirroring the Fed has they have been wont to do, Banxico will raise rates by 25-bps this afternoon. As it is priced-in, any impact to USD/MXN will be via forward guidance. The data released earlier today painted a picture of a strengthening US economy, with November US Advance Retail Sales grew by nearly triple the rate that was expected. The Atlanta Fed’s GDPNow forecast for Q4’17 US growth sees GDP coming in at +2.9%, but an update with a likely revision higher is due out later on today.

DailyFX Webinar Calendar: Thursday, December 14, 2017

DailyFX US AM Digest: Euro and Pound Ease off after ECB and BOE

IG Client Sentiment Index Chart of the Day: EURUSD

DailyFX US AM Digest: Euro and Pound Ease off after ECB and BOE

Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page

EURUSD: Retail trader data shows 39.3% of traders are net-long with the ratio of traders short to long at 1.55 to 1. The percentage of traders net-long is now its lowest since Dec 05 when EURUSD traded near 1.18303. The number of traders net-long is 14.7% lower than yesterday and 15.3% lower from last week, while the number of traders net-short is 2.3% higher than yesterday and 5.7% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EURUSD-bullish contrarian trading bias.

Five Things Traders are Reading

  1. “U.S. Dollar Folds at Resistance on Fed, ECB, BoE: A Recap” by James Stanley, Currency Analyst
  2. “EUR Waits For ECB Press Conference After Policy Left Unchanged” by Nick Cawley, Analyst
  3. “GBP Steady as Bank of England Stands Pat on Monetary Policy” by Nick Cawley, Analyst
  4. US Dollar Index (DXY) Falls as Fed Continues to Expect 3 Hikes In 2018” by Tyler Yell, CMT, Forex Trading Instructor
  5. “Futures Market Heralds a New Era of Trading for Bitcoin and Cryptocurrencies” by Christopher Vecchio, CFA, Senior Currency Strategist

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