EUR/USD FIST Update, March 02
Hi traders, here's a detailed update and forecast for EUR/USD.
FUNDAMENTALS:
Fundamentals remain bearish for the pair. With rising US (but also European) yields, better than expected US Manufacturing PMIs (60.8 vs 58.7), and weak European numbers this morning (German retail sales -4.5%, Spanish and German unemployment change missing forecasts), the pair is poised to further weakness.
Markets are also pricing in a possible reaction by the ECB to keep borrowing costs lower. The central bank will have to increase its speed of bond buying in order to suppress yields from rising any further.
SENTIMENT:
CoT: The latest CoT report shows a slight increase in EUR longs (3k) and shorts (5k) compared to the previous week, but the net positioning is bearish for the currency among fast money.
The euro also shows a relatively mixed performance among major currencies, while the USD is outperforming all currencies except the AUD. The Swiss franc is the weakest currency in the NY open, which signals a risk-on sentiment (EUR/USD bullish).
TECHNICALS
From a technical standpoint, the pair is trading in a strong downtrend and has recently reached a major liquidity zone near the 61.8% Fib level, that also aligns with a horizontal resistance area. If the 1.2038 level holds, I am looking for a retest of the 1.1990 level.
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FUNDAMENTALS:
Fundamentals remain bearish for the pair. With rising US (but also European) yields, better than expected US Manufacturing PMIs (60.8 vs 58.7), and weak European numbers this morning (German retail sales -4.5%, Spanish and German unemployment change missing forecasts), the pair is poised to further weakness.
Markets are also pricing in a possible reaction by the ECB to keep borrowing costs lower. The central bank will have to increase its speed of bond buying in order to suppress yields from rising any further.
SENTIMENT:
CoT: The latest CoT report shows a slight increase in EUR longs (3k) and shorts (5k) compared to the previous week, but the net positioning is bearish for the currency among fast money.
The euro also shows a relatively mixed performance among major currencies, while the USD is outperforming all currencies except the AUD. The Swiss franc is the weakest currency in the NY open, which signals a risk-on sentiment (EUR/USD bullish).
TECHNICALS
From a technical standpoint, the pair is trading in a strong downtrend and has recently reached a major liquidity zone near the 61.8% Fib level, that also aligns with a horizontal resistance area. If the 1.2038 level holds, I am looking for a retest of the 1.1990 level.
Please hit the "LIKE" button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
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