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.

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
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • The Indian Rupee may weaken following a breakout higher in USD/INR. Despite rising global stock market volatility, the Nifty 50 has been holding its ground. Could it capitulate lower? Find out from @ddubrovskyFX here:https://t.co/BNJ5uTKz1A https://t.co/x0YxwlKWaR
  • Relief rally ahead for $AUDNZD? Bullish RSI divergence at key psychological support (1.0600) suggests a rebound back towards the 21-MA (1.0626) and 50-MA (1.0659) could be on the cards Conversely, a break below 1.0590 probably opens the door for further losses. $AUD $NZD https://t.co/1zUvYXyLBh
  • WTI Crude Oil fell to a fresh four-month-low this morning. This fresh low broke through range support that’s held for the better part of two months. Get your #crudeoil technical analysis from @JStanleyFX here: https://t.co/UMeWEIrTSh https://t.co/a3Ujc3Rf2z
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: -0.02% 🇳🇿NZD: -0.16% 🇦🇺AUD: -0.25% 🇬🇧GBP: -0.42% 🇨🇭CHF: -0.59% 🇪🇺EUR: -0.62% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/vspt9gv2qH
  • Nasdaq futures pivot sharply lower in the wake of earnings from $AMZN, $GOOGL, $FB and $AAPL, which comprise over 35% of the tech-heavy index collectively. $NQ_F $NDX still trading positive on the day. https://t.co/w5yqbxsqjb https://t.co/4jxdwQY8yo
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.13% Silver: -0.55% Gold: -0.57% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/Lgi1Jei5qJ
  • Apple earnings: EPS $0.73 vs $0.71 est Revenue $64.70B vs est $63.47B $AAPL
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.31%, while traders in NZD/USD are at opposite extremes with 66.78%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/k2e06fEjoh
  • ECB Pre-Commits to More Stimulus: ECB’s Lagarde had stated that the GC were in agreement that given the current backdrop, risks were clearly tilted to the downside. Get your market update from @JMcQueenFX here:https://t.co/KPjoDcQ0D0 https://t.co/vV1nprDCKL
  • Watch @PeterHanksFX, @DailyFX Equity Analyst covering the Earnings live - https://t.co/cpf5s3UvUn
Where Should We Expect the EUR/USD's Rally to Find Sustained Lift?

Where Should We Expect the EUR/USD's Rally to Find Sustained Lift?

2017-05-17 01:44:00
John Kicklighter, Chief Strategist
Share:

Talking Points:

  • EUR/USD has charged to a six-month high, but its drive higher doesn't seem to carry clear fundamental lines
  • Risk trends continue to inch higher with limited conviction and problem for those looking to play a trend
  • Top event risk will struggle for a volatility response and lack trend potential - UK jobs, Japan and Russia GDP, US debt

See how the DailyFX Analysts' 2Q forecasts for the Dollar, Euro, Pound, Equities and Gold are shaping up in the DailyFX Trading Guides.

There continues to be little enthusiasm associated to the record and multi-year highs set by the favorite risk assets for global investors. That does not bode well for those looking to conviction to build momentum behind existing exposure that carries increasing baggage in the eyes of warry traders. For the benchmark S&P 500, this week's progress to record highs struggles to even draw out more headline attention than the reference to the lackluster volatility behind the broader market. The activity measures remain as deflated as they've been these past weeks. The VIX may have found its way above the closely watched 10 figure, but the meandering below 11 (currently a 17 day count) is unprecedented. That doesn't add much in the way of new information, but it reminds us how extreme circumstances are and should direct our trading approach.

While quiet is pervasive, not everything is landlocked. The EUR/USD this past session extended a remarkable run. The three-day surge from this most liquid of currency pairs - arguably the most heavily traded asset overall - pushes a six month high and draws attention as well as hope that there is a light of opportunity in these quiet times. Yet, as with any trade candidate, we need to consider potential for follow through rather than simply be drawn in by volatility. If this particular pair is due a strong trend, its influence could shake up traders through the FX market - or at least Dollar and Euro-based pairs. When assessing the motivation, however, the questions outnumber the answers. While the ICE Dollar Index (DXY) has tumbled, it is heavily weighted to EUR/USD. When we consult an index that offers more even weight or just look to other majors, we don't see anywhere near the same conviction. In contrast, the Euro has leveraged strength across the board. That draws its own problems as the traditional fundamental fuel to this move is fumes. It doesn't look like it will find any top offs in the immediate future. This is a precarious upon which to place a continuation trade. It may on the other hand, shape a decent reversal should the certain cues present themselves.

Back on the Dollar pairs, GBP/USD and USD/CAD may reflect the better circumstances for our particular backdrop. As unappealing as these are from a sheer volatility perspective, these are not times to chase the ghosts of previous sizable swings or to preempt something that may take weeks or even months to show. Certainly the traditional docket won't help to shake us from these quiet conditions. Top (known) listings include: US debt figures; Japan and Russian 1Q GDP data; and UK employment. Of this round of event risk, the jobs statistics have the more appropriate historical precedence of measured move. Themes - like broad risk trends, global trade relationships, geo-politics, shifting confidence in global policy - will be moved by unplanned forces. In these conditions, trades placing heavier emphasis on conditions and technicals versus fundamentals is preferable. EUR/USD and USD/CAD may better answer those needs. We look at markets as they are in today's Trading Video.

To receive John’s analysis directly via email, please SIGN UP HERE

Where Should We Expect the EUR/USD's Rally to Find Sustained Lift?Where Should We Expect the EUR/USD's Rally to Find Sustained Lift?

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

DISCLOSURES