Skip to content
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
Euro Price Forecast: EUR/USD Below 1.05 After ECB’s Sintra Forum Spells Uncertainty

Euro Price Forecast: EUR/USD Below 1.05 After ECB’s Sintra Forum Spells Uncertainty

Warren Venketas, Analyst

EUR/USD TALKING POINTS

  • Markets will be looking for more guidance from the ECB today.
  • U.S. Core PCE data in focus.
Advertisement

EURO FUNDAMENTAL BACKDROP

The euro was hit hard yesterday during the ECB’s Sintra Forum panel discussion which included Fed Chair Jerome Powell, the BoE’s Governor Bailey, General Manager Augustin Carstens and the ECB President Christine Lagarde. While the Fed “out-hawked’ the rest but it was consensus that inflation remains key for all central banks at this point and that inducing a recession is a far lesser risk that wages spiraling out of control.

From a eurozone perspective, we received no clarity around anti-fragmentation particularly after yesterdays soaring Spanish inflation release which highlighted the tricky task the ECB has to navigate inflation concerns as well as rising peripheral bond spreads. This ‘kicking the can down the road’ approach was not received well by markets and even took off roughly 23bps off the year-end rate hike figure that was priced in only a day ago.

EUR/USD ECONOMIC CALENDAR

The economic calendar highlights the U.S. core PCE release later today which is traditionally the Fed’s preferred measure of gauging inflation. Forecasted figures are expected to be marginally lower. A miss may well give the euro some reprieve ahead of President Christine Lagarde’s speech shortly after.

eurusd calendar

Source: DailyFX economic calendar

TECHNICAL ANALYSIS

EUR/USD DAILY CHART

eurusd daily chart

Chart prepared by Warren Venketas, IG

Price action on thedaily EUR/USD chart shows bears extending yesterdays downside this morning. I think we may find support around 1.0400/1.0340 before a possible turnaround. This being said, if the ECB continues on it’s cautious path the euro could definitely weaken further against the greenback.

Resistance levels:

  • 1.0601
  • 20-day EMA (purple)
  • 1.0500

Support levels:

  • 1.0340

IG CLIENT SENTIMENT DATA: BEARISH

IGCS shows retail traders are currently LONG on EUR/USD, with 69% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment resulting in a short-term downside bias.

Contact and follow Warren on Twitter: @WVenketas

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

DISCLOSURES