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
Bullish
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
Wall Street
Bullish
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • Wrote about something similar back in April: https://t.co/4tRHHWZH4r https://t.co/ey3QtOA2oj
  • Geopolitical risks impacting markets in the week ahead: #AUD May Fall on US-China Trade Deal Fears, #CrudeOil Eyes #OPEC Meeting- https://www.dailyfx.com/forex/fundamental/article/special_report/2020/07/13/AUD-May-Fall-on-US-China-Trade-Deal-Fears-Crude-Oil-Eyes-OPEC-Meeting.html
  • Have you been catching on your @DailyFX podcast "Global Markets Decoded"? Catch up on them now, before new episodes release! https://t.co/Twr44cZ1GB https://t.co/wSHeU7aRoX
  • 🇯🇵 Tertiary Industry Index MoM (MAY) Actual: -2.1% Previous: -7.7% https://www.dailyfx.com/economic-calendar#2020-07-13
  • 🇯🇵 Tertiary Industry Index MoM (MAY) Actual: -2.1% Previous: -6.0% https://www.dailyfx.com/economic-calendar#2020-07-13
  • 🇯🇵 Tertiary Industry Index MoM (MAY) Actual: -2,1% Previous: -6.0% https://www.dailyfx.com/economic-calendar#2020-07-13
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.93%, while traders in US 500 are at opposite extremes with 76.12%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/TRp6GF9snQ
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.32% 🇬🇧GBP: 0.27% 🇪🇺EUR: 0.24% 🇨🇭CHF: 0.16% 🇯🇵JPY: 0.09% 🇳🇿NZD: 0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/O81hxQPBpL
  • Heads Up:🇯🇵 Tertiary Industry Index MoM (MAY) due at 04:30 GMT (15min) Previous: -6.0% https://www.dailyfx.com/economic-calendar#2020-07-13
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Germany 30: 1.31% France 40: 1.23% FTSE 100: 0.94% Wall Street: 0.64% US 500: 0.54% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/YSclbAH1mY
EUR/USD Running Higher as Risk-On Sentiment Presses Down on the US Dollar

EUR/USD Running Higher as Risk-On Sentiment Presses Down on the US Dollar

2020-06-03 11:00:00
Nick Cawley, Strategist
Share:

Euro-Zone PMI Data and EUR/USD Price, News and Analysis:

  • PMI data points to the Euro-Zone economy contracting by 9% this year.
  • EUR/USD rally has taken out notable resistance levels.
EUR Forecast
EUR Forecast
Recommended by Nick Cawley
Q2 Euro Forecast
Get My Guide

Euro-Zone Final PMI Beats Forecasts but Contraction Remains Severe

The final Euro-Zone composite PMI (May) picked-up sharply from April’s multi-decade low, suggesting that economic slump in the region is starting to turn round. While encouraging, and with future PMIs likely to show business activity picking up as lockdown measures are unwound, Euro-Zone GDP is ‘set to fall at an unprecedented rate in the second quarter, accompanied by the largest rise in unemployment seen in the history of the euro area’ according to Chris Williamson, chief business economist at data provider IHS market.

The final Euro-Zone composite index rose to 31.9 compared to a flash reading of 30.5 and April’s multi-decade low of 13.6. The services index rose to 30.5 compared to a flash reading of 28.7 and a prior month’s 12.0.

The report noted that while optimism has returned, and pessimism moderated, ‘Our forecasters expect GDP to slump by almost 9% in 2020 and for a recovery to pre-pandemic levels of output to take several years’.

IHS Markit PMI Release

EUR/USD Benefits From Relentless US Dollar Slide

The global risk-on rally remains in full-flow with riskier assets in demand as central bank benevolence eclipses political and economic uncertainty. The safe-haven US dollar remains out of favor and has dropped below the important 200-day moving average and continues to print lower highs and lower lows, suggesting further losses ahead. The outlook for EUR/USD remains positive unless this risk tone reverses.

US Dollar Out of Favor, Global Risk Rally in Full Swing – Cross Asset Correlation

US Dollar Basket (DXY) Daily Price Chart (November 2019 – June 3, 2020)

Chart showing US dollar falling

The ECB meeting on Thursday will likely see the central bank increase its recently announced Pandemic Emergency Response Program (PEPP) further to boost market liquidity further. The original EUR 750 billion program launched in March is expected to be completed by October and as such a further increase of EUR 500-750 billion is likely to be announced Thursday.

The EUR/USD short-term rally off the May 25 low at 1.0870 continues with the pair breaking through the 200-dma on May 28 and not looking back. The 50% Fibonacci retracement of the March 9-22 sell-off was also broken on the same day, with the 61.8% Fib at 1.1107 also taken out this week. Higher lows and higher highs dominate recent price action and there is now little in the way of a complete re-trace of the March sell-off. The CCI indicator shows that the market is currently overbought, adding a note of caution to further upside, but overall unless the global risk sentiment changes or the US dollar gets a strong, lasting bid, EUR/USD looks set to probe fresh multi-week highs.

EUR/USD Daily Price Chart (October 2019 – June 3, 2020)

Chart showing eurusd rallying
EUR/USD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 3% 3% 3%
Weekly -2% 4% 2%
Learn How to Use Sentiment in Your Trading Strategy
Get My Guide

What is your view on EUR/USD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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

DISCLOSURES

News & Analysis at your fingertips.