EURUSD Finds Little Support From Positive Euro-Zone Data
Euro News and Talking Points
- EURUSD ignores sentiment data – waits for Fed and ECB policy meeting minutes.
- EURUSD traders need to look at this week’s economic calendar for upcoming pinch points.
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Positive ZEW Data Unable to Boost EURUSD
German ZEW survey expectations slipped to 17.8 beating expectations of 16 while the Euro-Zone economic sentiment also nudged marginally lower to 29.3 against January’s reading of 31.8. While both numbers were lower than the previous month it should be noted the very high levels recorded over the last few months. The survey also pointed to slightly higher inflation expectations over the next six months.
“The latest survey results continue to show a positive outlook for the German economy. The assessment of the current economic situation is still on a very high level and the economy is expected to improve in the coming six months. Economic growth in Germany is substantially driven by the very good development of both the global economy and private consumption. Inflation expectations for Germany and the Eurozone have also started to increase,” wrote ZEW President Professor Achim Wambach
EURUSD traders also need to be aware of upcoming data and releases in both Europe and the US in the next two days. On Wednesday, the latest provisional Euro-Zone PMIs are released early in the morning while later in the session the FOMC minutes from the last Fed meeting will be on deck.On Thursday the February German IFO data is released at 09:00 GMT ahead of the ECB account of the January 24-25 policy meeting at 12:30 GMT.
EURUSD Price Chart One Minute Timeframe (February 19-20, 2018)
Retail Traders Remain Short of EURUSD
IG Client Sentiment data show 34.5% of traders are net-long with the ratio of traders short to long at 1.9 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.05519; price has moved 17.0% higher since then. The number of traders net-long is 3.2% higher than yesterday and 12.2% lower from last week, while the number of traders net-short is 16.7% higher than yesterday and 17.6% higher 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.
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--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.