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.

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
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
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
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • GBP turbulence persists as investors eye the next round of EU-UK Brexit negotiations. Cautious optimism signals a deal is near. Get your #currencies update from @JMcQueenFX here: https://t.co/WjU4oYpmf7 https://t.co/VcNnCjm0B2
  • An economic calendar is a resource that allows traders to learn about important economic information scheduled to be released. Stay up to date on the most important global economic data here: https://t.co/JdvW6HNuqV https://t.co/AiLoS7DrEQ
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/3Wked6GBOp https://t.co/HicBmGrokK
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here:https://t.co/7kPzAoNoLG https://t.co/5lbyBJeeA7
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/lAFyv1gM0P https://t.co/ubLimoYAcr
  • What is the outlook for financial markets ahead of the first presidential debate and how are Democratic nominee Joe Biden and President Donald Trump doing in the polls? Find out from @ZabelinDimitri here:https://t.co/QQwAZTxZFg https://t.co/4cRhRCiv3C
  • The US Dollar could gain as it forms bullish technical formations against the Singapore Dollar and Malaysian Ringgit. USD/PHP may have bottomed, will USD/IDR rise next? Find out from @ddubrovskyFX here:https://t.co/3UIKmbLIvD https://t.co/PY2YyH4vkQ
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/3wsYlSxd26 https://t.co/z2qB9p8IgX
  • A proxy of #EmergingMarket capital flows hit its lowest since July, falling with the #SP500 after some divergence This is as #USD gained against its developing FX counterparts, highlighting potential risk of a spillover outwards Stay tuned for next week's #ASEAN fundy outlook! https://t.co/kAvpnb0EXO
  • 4 consecutive down weeks for the #SP500, last matched over a year ago #Fed balance sheet continues to gain very cautiously, now at its highest since the middle of June. Still, at slower pace than last week Focus shifts to US fiscal stimulus next week in the House of Reps https://t.co/f8zpSILm86
EUR Direction Dependent on ECB's Guidance on Growth Outlook

EUR Direction Dependent on ECB's Guidance on Growth Outlook

2018-10-25 11:12:00
Justin McQueen, Analyst
Share:

EUR Analysis and Talking Points

  • ECB Forward Guidance Key to Euro Direction
  • Downside Risks to Eurozone

Check out the brand new Q4 FX forecast guides

ECB Forward Guidance Key to Euro Direction

The ECB will take centre stage today despite the fact that little is expected from the meeting itself. The central bank is expected to keep all rates unchanged and as such, focus will be firmly placed on President Draghi’s press conference and specifically in relation to the assessment regarding growth. The current guidance states that risks to the growth outlook are broadly balanced, which had been an upgrade from the previous guidance that risks to growth are tilted to the downside. Consequently, given the recent developments eyes will on whether Draghi reverts to previous guidance.

Downside Risks to Eurozone

Political uncertainty in Italy following their budget announcement has sparked Bund-BTP bond spreads to the widest level in 5yrs as the EU and Italy continue to clash over the budget, while rating downgrades from the likes of Moody’s has also increased concerns for Italian debt.

Another cause of concern for Mario Draghi is the evident slowdown in the Eurozone as highlighted by the latest PMI data, in which the composite reading dropped to the lowest level in 25-months. The survey also indicated that GDP growth for Q4 is seen hovering around 0.3%. The impact of trade wars is seemingly having its impact on the Eurozone and most notably Germany, whereby the DAX is hovering around bear market territory. While the recent volatility in financial markets have also increased investor angst over global growth prospects.

DAX TRADING RESOURCES

How to Trade Dax 30: Trading Strategies and Tips

ECB Source Reports

Since the prior meeting, ECB source reports had hit newswires suggesting that few members had wanted guidance on growth to state that risks are tilted to the downside. If indeed, the doves on the committee get their way, this may weigh on the Euro against its counterparts.

Draghi Clarity

While downside risks have appeared to have grown in recent weeks an upbeat assessment from President Draghi and a dismissal of the recent turbulence may curb any further selling the Euro with the ECB undeterred from altering its plan to end QE.

EURUSD PRICE CHART: Daily Time-Frame (June-Oct 2018)

EUR Direction Dependent on ECB's Guidance on Growth Outlook

Chart by IG

A dovish reaction from the ECB may see the Euro make a move towards the 2018 low situated at 1.13 handle. On the topside, resistance is located at 1.1430, which marked the previous double bottom (Oct 9th and 19th). Option break-even straddles suggest a 64pip move from the ECB release.

KEY TRADING RESOURCES:

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

DISCLOSURES