Euro Price, News and Analysis:
- EUR/USD may break out of its current torpor with a move higher more likely.
- Retail sentiment is mixed.
EUR/USD price action over the last few days has been biased towards the upside but with little real conviction. The US dollar side of the pair has produced most of the recent movement, with the greenback’s weakness helping EUR/USD back towards 1.2200 and possibly higher. Fed chair Jerome Powell yesterday suggested that the economy needed more for longer before sustained inflation appears and rate hikes are needed, and he is likely to repeat this message later today in front of the House Financial Services Committee.
The economic calendar shows little in the way of market-moving Euro news, while the US has more to look forwards to going through to the end of the week. The latest durable goods data is released at 13:30 GMT today, core PCE (Jan) is released tomorrow along with Michigan consumer sentiment, while ISM manufacturing PMI is on the docket for Friday. For all market-moving economic data and events, see the DailyFX Calendar.
The daily chart shows EUR/USD capped below 1.2192/1.2200 although the pair are currently getting a small boost from the 50-day simple moving average. If they can hold above this sma then a push higher is likely. The pair’s price action doesn’t suggest a great deal of volatility, nor does the 14-day ATR, and any further move higher may be more a slow grind than a traditional break of resistance with a burst of volatility.
EUR/USD Daily Price Chart (August 2020 – February 24, 2021)
| Change in | Longs | Shorts | OI |
| Daily | -4% | 2% | -1% |
| Weekly | 3% | 9% | 6% |
IG Retail trader datashow 44.30% of traders are net-long with the ratio of traders short to long at 1.26 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EUR/USD trading bias.
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.
