EUR/USD: A deep look using FIST analysis 📊
Updated
Good morning traders,
Our today's Trade of the Day has already reached on of the profit targets and is currently trading 100 pips in plus.
Now, here's a FIST update on EUR/USD. FIST stands for Fundamental, Intermarket, Sentiment, and Technical analysis.
Fundamental
The weak dollar pushed the EUR/USD pair higher and caused a break below the important 1.20 level. This morning, the pair is giving back some gains on risk-off flows and on portfolio rebalancing ahead of the ECB meeting later this week.
The ECB meeting on Thursday is the most important event for the EUR this week. The ECB is expected to provide further stimulus to the slowing economy of the eurozone by increasing its PEPP program by around $400-$600 billion and providing new long-term loans at very favorable rates.
As inflation is slowing down, further stimulus that could increase inflationary pressures will likely be seen as positive for the euro.
In the US, CPI numbers and unemployment claims are the main reports of the week. CPI and core CPI are expected to rise to 0.1% (prev. 0.0%). Unemployment claims are expected higher as well at 723K (prev. 712K).
INTERMARKET
The current difference between the 2y US and German yields signal the possibility of further weakness in EURUSD. However, it's important to note that the downtrend in yield differentials has mostly been the result of lower US yields.
SENTIMENT
Fast money has increased its bullish positioning the euro for the third consecutive week ahead of the ECB. Bullish bias has now reached the highest level since October 27, without extreme positioning, signaling further upside potential in the pair.
TECHNICALS
The technical picture looks bearish in the short-term, but I expect liquidity to enter the market again near the 1.2000 level, which is an important level for the pair. If volume confirms an entry, this is the first level to enter with a long position.
The second level to watch is the 1.1860-1.1880 area, where the pair could also face buying pressure.
Please hit the "LIKE" button if you find this post useful! Let me know your views on the pair in the comment section below.
Our today's Trade of the Day has already reached on of the profit targets and is currently trading 100 pips in plus.
Now, here's a FIST update on EUR/USD. FIST stands for Fundamental, Intermarket, Sentiment, and Technical analysis.
Fundamental
The weak dollar pushed the EUR/USD pair higher and caused a break below the important 1.20 level. This morning, the pair is giving back some gains on risk-off flows and on portfolio rebalancing ahead of the ECB meeting later this week.
The ECB meeting on Thursday is the most important event for the EUR this week. The ECB is expected to provide further stimulus to the slowing economy of the eurozone by increasing its PEPP program by around $400-$600 billion and providing new long-term loans at very favorable rates.
As inflation is slowing down, further stimulus that could increase inflationary pressures will likely be seen as positive for the euro.
In the US, CPI numbers and unemployment claims are the main reports of the week. CPI and core CPI are expected to rise to 0.1% (prev. 0.0%). Unemployment claims are expected higher as well at 723K (prev. 712K).
INTERMARKET
The current difference between the 2y US and German yields signal the possibility of further weakness in EURUSD. However, it's important to note that the downtrend in yield differentials has mostly been the result of lower US yields.
SENTIMENT
Fast money has increased its bullish positioning the euro for the third consecutive week ahead of the ECB. Bullish bias has now reached the highest level since October 27, without extreme positioning, signaling further upside potential in the pair.
TECHNICALS
The technical picture looks bearish in the short-term, but I expect liquidity to enter the market again near the 1.2000 level, which is an important level for the pair. If volume confirms an entry, this is the first level to enter with a long position.
The second level to watch is the 1.1860-1.1880 area, where the pair could also face buying pressure.
Please hit the "LIKE" button if you find this post useful! Let me know your views on the pair in the comment section below.
Note
Note
👆 USD could fall further
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.