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
EUR/USD Pops Above 1.1900 on Better-Than-Expected Euro Zone GDP Data

EUR/USD Pops Above 1.1900 on Better-Than-Expected Euro Zone GDP Data

Nick Cawley, Strategist

Euro (EUR/USD)Price, Chart, and Analysis

  • Strong Euro Zone growth and inflation data helped underpin recent Euro strength.
  • Retail traders cut back long positions, increase net-shorts.

The Euro Zone economy expanded by 2.0% in the first look at Q2 q/q data, beating analysts’ expectations of a 1.5% increase. Among member states Portugal (4.9%) recorded the highest increase, followed by Austria (4.3%) and Latvia (3.7%). The block’s largest member state Germany grew by 1.5%, missing forecasters’ expectations of a 2.0% rise.

Euro area annual inflation rose by 2.2%, up from 1.9% in June, boosted by a 14.1% rise in energy prices, while food, alcohol and tobacco prices rose by 1.6%. The Euro area unemployment rate fell to 7.7%.

EUR/USD Pops Above 1.1900 on Better-Than-Expected Euro Zone GDP Data

For all market-moving economic data and events, see the DailyFX Calendar.

The latest data has helped to underpin the recent EUR/USD rally and has pushed the pair back above 1.1900 for the first time in one-month. Above here, the 23.8% Fibonacci retracement level at 1.1952 becomes the next target/level of resistance. While today’s data has helped the move, the recent US dollar weakness has also played a major part in the rally. The release later today (13:30 BST) of the Fed’s favored measure of inflation, US Core PCE, will now become key in determining if the current move in EUR/USD can be extended into the weekend. In addition, month-end flows may add an extra layer of volatility into the pair.

EUR/USD Daily Price Chart (December 2020 – July 30, 2021)

EUR/USD Pops Above 1.1900 on Better-Than-Expected Euro Zone GDP Data

Retail trader data show 48.03% of traders are net-long with the ratio of traders short to long at 1.08 to 1. The number of traders net-long is 10.72% lower than yesterday and 23.12% lower from last week, while the number of traders net-short is 14.97% higher than yesterday and 33.67% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise.Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/USD-bullish contrarian 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.

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

DISCLOSURES