Euro Talking Points
The EURUSD was gaining some momentum at the open of the European session this morning, taking it past yesterday’s high of 1.1187, that came on the back of US inflation figures that missed expectations and failed to provide support for the Dollar. EURUSD bulls were reinforced as German unemployment change came in at -12k, beating expectations of just -5k. The German unemployment rate remained stable at 4.9% as expected.
German unemployment change measures the absolute change in number of people employed in Germany. A reading below expectations is seen as positive as more people are working which leads to a boost in the economy. A lower than expected figure is seen as bullish for the Euro.
EURUSD PRICE CHART: 1 Minute Time-Frame (Intraday - April 30, 2019)
A Heavy Session Ahead for the Euro
As the pair has mostly been dollar-driven in the past few sessions, today may be an expection as a busy session lies ahead for European data which is expected to bring volatility to the Euro. With focus later on in the morning around Euro-Zone GDP figures due to be released at 10am UK time, the market will shift to Germany again in the early afternoon as German CPI figures are to be released at 1pm. Both the MoM and YoY figures are expected to increase, coming in at 1.5% and 1.5%, up from 0.3% and 1.3% repectively.
If we see stronger unemployment and better than expected growth figures coming from the Eurozone we may see the Euro continue its recent uptrend.
EUR Forecast: Traders Eye Eurozone GDP, Jobs, CPI Data Upcoming
IG Client Sentiment – EURUSD: Retail trader data shows 67.4% of traders are net-long with the ratio of traders long to short at 2.07 to 1. In fact, traders have remained net-long since Apr 12 when EURUSD traded near 1.12763; price has moved 0.9% lower since then. The number of traders net-long is 0.5% lower than yesterday and 14.7% higher from last week, while the number of traders net-short is 9.2% higher than yesterday and 20.4% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EURUSD prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
Recommended Reading
EURUSD Weekly Technical Outlook: Euro May Bounce, but Buyer Beware – Paul Robinson, Currency Strategist
Eurozone Debt Crisis: How to Trade Future Disasters – Martin Essex, MSTA, Analyst and Editor
KEY TRADING RESOURCES:
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- See our Q1 forecasts to learn what will drive FX the through the quarter.
--- Written by Daniela Sabin Hathorn, Junior Analyst
