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EUR/USD Update - Popping Higher on Hawkish ECB Comments

EUR/USD Update - Popping Higher on Hawkish ECB Comments

Nick Cawley, Senior Strategist

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EUR/USD, EUR/GBP Price, Chart, and Analysis

  • Comments from the Latvian central bank governor boost the Euro.
  • EUR/USD sell-off stalls for now.
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In an interview with Bloomberg, ECB governing council member Martins Kazaks said that an interest rate hike is possible in July and that the central bank’s ‘gradual approach doesn’t mean a slow response’. The Latvian central bank governor added that the ECB does not need to wait to see stronger wage growth and that ‘zero is not a cap for the deposit rate facility’. This hawkish twist, after last week’s mildly dovish ECB meeting, has given the Euro a boost across a range of currencies, albeit from lowly levels.

ECB Leaves Monetary Policy Unchanged, Euro Drops on Hawkish Disappointment

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Earlier in the day, the latest German PPI numbers highlighted the ongoing risk of inflation in the block’s largest member, beating elevated expectations by a wide margin. The rise in annual factory gate prices was the largest since records began in 1949.

For all market-moving data releases and events, see the DailyFX Economic Calendar

The Euro is currently 0.65% higher against the US dollar at 1.0863 after testing the 1.0800 support level in recent days.

EUR/USD Daily Price Chart – April 20, 2022

The single currency is 0.25% higher against the British Pound, continuing its short-term rally off a multi-week low of 0.8250.

EUR/GBP Daily Price Chart – April 20, 2022

Retail trader data show 72.54% of traders are net-long with the ratio of traders long to short at 2.64 to 1. The number of traders net-long is 3.27% lower than yesterday and 4.27% lower from last week, while the number of traders net-short is 14.52% higher than yesterday and 14.88% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse higher despite the fact traders remain net-long.

EUR/USD Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -1% 10% 4%
Weekly 53% -15% 13%
What does it mean for price action?
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What is your view on the EURO – 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.

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