EUR/USD Update - Popping Higher on Hawkish ECB Comments
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EUR/USD, EUR/GBP Price, Chart, and Analysis
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.
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.