Never miss a story from Nick Cawley

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.
For more info on how we might use your data, see our privacy notice and access policy and privacy website.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo
Or, read more articles on DailyFX

You are subscribed to Nick Cawley

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Euro, US dollar and Italian Government Bond Yields Talking Points:

  • EURUSD below all three moving averages.
  • Italian government bond yields nudge lower.

We have just released our Q4 Trading Forecasts including USD and EUR.

EURUSD Nudges Higher but Move Looks Suspect

EURUSD has bounced back off yesterday’s 1.15050 low and is heading back towards 1.1600 on a newspaper report that the Italian government plans to reduce its budget deficit to 2% in 2021 after announcing last week that the deficit would be 2.4% for the next three years. This caused concern higher up in the EU who warned Italy to trim its deficit targets. Italian bond yields soared to multi-year highs yesterday on the news as investors fled Italian assets.

Italian government bond yields are lower today on the news, but the move is far from convincing. 10-year bonds yield 3.32%, down from a multi-year high print of 3.46%, while the 10-year Italy/German spread has narrowed back to around 290 basis points from 300+ on Tuesday. 10-year Italian bonds traded with a yield around 2.70% three weeks ago.

On the daily chart, EURUSD continues to find resistance from the 50-day moving average at 1.15947, followed by the 20-day ma at 1.16640. Above here the Fibonacci resistance (38.2%) comes into play at 1.1710. On the downside, support remains at 1.15081 for the time being, although a break and close below would open up 1.14480 (50% Fib) ahead of 1.1301.

IG Client Sentiment Datashows that traders are 54.3% net-long EURUSD. Recent daily and weekly changes show longs are increasing giving us a stronger bearish contrarian trading bias. See how this sentiment data can help you in your decision making process.

EURUSD Daily Price Chart (February – October 3, 2018)

EURUSD Remains Technically Weak Despite Italian Budget Chatter

Italian Budget Primer.

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on EURUSD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.