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.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
Gold
Mixed
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
Bitcoin
Mixed
More View more
Real Time News
  • $SPX < 3,200
  • Commodities Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Gold: -0.48% Oil - US Crude: -1.02% Silver: -1.49% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/fuN1JsPmS0
  • $EURUSD resistance has held thus far. But higher-lows coming in, setting up an ascending triangle this is similar to the backdrop in USD in early-Jan, just before the bullish reversal came in - discussed here at the time https://www.dailyfx.com/forex/market_alert/2020/01/07/correction-conundrum-in-the-us-dollar-eur-usd-usd-cad-aud-usd-js57.html https://t.co/uze2m6I5y7
  • 🇺🇸 USD Consumer Confidence Index (FEB), Actual: 130.7 Expected: 132.2 Previous: 130.4 https://www.dailyfx.com/economic-calendar#2020-02-25
  • Taking this morning's Consumer Confidence report with a grain of salt... initial survey data chopped off on the 18th of every month...
  • 🇺🇸 USD Conf. Board Present Situation (FEB), Actual: 165.1 Expected: N/A Previous: 173.9 https://www.dailyfx.com/economic-calendar#2020-02-25
  • Consumer confidence below expectations and last month's print... $USD a touch weaker https://t.co/DYNQjw1u8w
  • 🇺🇸 USD Conf. Board Present Situation (FEB), Actual: 165.1 Expected: N/A Previous: 175.3 https://www.dailyfx.com/economic-calendar#2020-02-25
  • 🇺🇸 USD Consumer Confidence Index (FEB), Actual: 130.7 Expected: 132.2 Previous: 131.6 https://www.dailyfx.com/economic-calendar#2020-02-25
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.02%, while traders in USD/CAD are at opposite extremes with 69.97%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Qj3w3u6ECz
EURUSD Bounces May Attract the Bears

EURUSD Bounces May Attract the Bears

2018-05-16 09:00:00
Nick Cawley, Analyst
Share:

EURUSD Talking Points

- US Treasury yields remain near multi-year highs.

- Growing Italian political fears will continue to weigh on the Euro.

Check out our new Trading Guides: they’re free and have been updated for the second quarter of 2018.

IG Client Sentiment data show 55.4% of traders are net-long EURUSD with the ratio of traders long to short at 1.24 to 1. Download the free guide and see what client changes mean and how you can use them when trading.

EURUSD Remains Weak and the Down Trend is Still Dominant

A combination of a weak Euro and a strong US dollar will continue to weigh on EURUSD although the pair may stage a small recovery in the short-term after recent sharp losses. While the 10-year break above 3.0% may have caused the most headlines, the 7-year UST now offers 3.03%, a level last seen in 2010, while the 5-year is quoted at 2.91%, levels last seen in 2008. Tuesday’s US retail sales matched expectations at 0.3% in April while the prior month’s number was upgraded to 0.8% from 0.6% adding to expectations that Q2 US growth may be stronger than first thought.

US Treasury Yields – May 16, 2018

EURUSD Bounces May Attract the Bears

In contrast, the single currency remains under pressure as the market waits for the outcome of discussions between Italy’s Five Star Movement and the Northern League. While the two parties seek to try and finalise a ruling government, unconfirmed reports are circulating that they may be seeking to renegotiate EU financial rules as well as Italy’s budget contributions and look for the ECB to forgive EUR250 billion of Italian debt. Italian bond yields rose Wednesday with the 10-yer touching a two-month high of 2% as investors continue to price in heightened risk.

EURUSD remains weak and any pull-back may be seen as a fresh opportunity to short the pair. With the January 9 swing low at 1.19140 a potential short-term set-up. Above there the 200-day moving average at 1.20500 may prove tough resistance to break through. On the downside, the swing lows at 1.17175 and 1.15540 look likely targets.

EURUSD Daily Price Chart (August 29, 2017 – May 16, 2018)

EURUSD Bounces May Attract the Bears

Would you like to know the Number One Mistake Traders Make? – Download our free guide to find out.

If you have questions or comments on this article, you can leave them in the section below, or you can contact the author via email at Nicholas.cawley@ig.com or via Twitter @nickcawley1.

--- Written by Nick Cawley, Analyst

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.