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
More View more
Real Time News
  • RT @KyleR_IG: A history of US fiscal and monetary stimulus and the US 10 year yield: more stimulus, higher rates. When it comes to QE, mor…
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfs2Iz https://t.co/DfG4YuKM4U
  • Wall Street Futures Update: Dow Jones (+0.03%) S&P 500 (-0.11%) Nasdaq 100 (-0.28%) [delayed] -BBG
  • Volatility follows the FOMC's slow approach to its second taper, but neither the Dollar nor the S&P 500 have held their charge. With US GDP ahead, expect the echoes of the central bank's warnings and watch $EURUSD and $USDCAD https://www.dailyfx.com/forex/video/daily_news_report/2021/07/29/EURUSD-Slow-Trigger-Reversal-and-USDCAD-Yet-to-Detonate-After-Fed-Before-US-GDP.html https://t.co/BCUTSX0WNY
  • China to continue allowing Chinese companies to IPO in US exchanges - CNBC via BBG
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 0.85% Gold: 0.46% Oil - US Crude: 0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/9QGWRaUfmI
  • The Swiss Franc’s technical stance against the New Zealand Dollar and Japanese Yen has brightened, with the technical outlook in NZD/CHF and CHF/JPY primed to benefit CHF. Get your market update from @FxWestwater here:https://t.co/u4GY00QpgC https://t.co/O9WscGjkwH
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.17% 🇬🇧GBP: 0.09% 🇨🇭CHF: 0.04% 🇳🇿NZD: 0.03% 🇪🇺EUR: 0.03% 🇦🇺AUD: -0.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/HNdAAVxqEA
  • (Gold Briefing) Gold Price Outlook Shifts Rosy Post FOMC, XAU/USD Eyeing US GDP Data Next #Gold #XAUUSD #GDP #Fed #FOMC https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/07/29/Gold-Price-Outlook-Shifts-Rosy-Post-FOMC-XAUUSD-Eyeing-US-GDP-Data-Next.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/EyIGPFRoQW
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 94.18%, while traders in France 40 are at opposite extremes with 69.12%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/I4p1Eqw06i
EURUSD Price Threatens sub-1.1400 as Euro-Zone Sentiment Sours

EURUSD Price Threatens sub-1.1400 as Euro-Zone Sentiment Sours

Nick Cawley, Strategist

Euro and US dollar:

  • Euro-Zone economic growth deteriorates.
  • EURUSD touches a fresh two-month low.
  • Italian bond yields nudge higher.
  • US Dollar Basket (DXY) rallies.

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

EURUSD Under Increasing Downside Pressure

The latest IHS Markit Euro-Zone PMIs will make uncomfortable reading for Mario Draghi ahead of Thursday’s ECB meeting with the composite index missing expectations and falling to a 25-month low of 52.7 compared to last month’s 54.1. And according to Markit, economic growth in the Euro-Zone is slowing down sharply.

‘The pace of Eurozone economic growth slipped markedly lower in October, with the PMI setting the scene for a disappointing end to the year. The survey is indicative of GDP growth waning to 0.3% in the fourth quarter, and forward-looking indicators, such as measures of future expectations and new business inflows, suggest further momentum could be lost in coming months' wrote Chris Williamson, chief business economist at IHS Markit. The slowdown is being led by a drop-in exports, linked to trade wars and tariffs, ‘which appear to have darkened the global economic environment and led to increased risk aversion.’

And ominously for the ECB Williamson added, ‘the headline PMI has fallen to a level that would historically be consistent with a bias towards loosening monetary policy in order to prevent any further deterioration of economic growth’.

Italian Bond Yields Remain Elevated; US Dollar Strengthens

Italian government bond yields remain near their multi-year highs after the EU Commission recently rejected the country’s contentious budget plan. The Italian government in reply said that the budget was designed for Italians and not for Brussels, leaving the way open for renewed disagreement – and higher yields - between the two over the next few weeks. The 10-yr Italian government bond currently yields 3.55%, up from 1.73% at the start of May this year.

Italian Bond Yields Lower but Euro Remains Weak – October 23.

EURUSD is also coming under pressure from an increasingly strong US dollar, buoyed by anticipation of further interest rate hikes in 2018 and 2019. The US dollar basket (DXY) currently trades at 95.82, near its recent multi-month high at 96.60. EURUSD is targeting the August 15 swing-low at 1.13010 – itself a 16-month low - before the 61.8% Fibonacci retracement of the January 2017/February 2018 rally at 1.1187 comes into play.

US Dollar (DXY) Touching a Two-Month High – October 23.

IG Client Sentiment Datashow investors are currently 60.8% net-long EURUSD – a contrarian bearish signal – but recent daily and weekly positional shifts give us a stronger bearish EURUSD bias.

EURUSD Daily Price Chart (April 2017 – October 24, 2018)

EURUSD Price Threatens sub-1.1400 as Euro-Zone Sentiment Sours

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.

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

DISCLOSURES