Get started

Ecb

Euro inflation rises, but euro yawnsThe euro continues to have a calm week. In the North American session, EUR/USD is showing little movement as it trades a whisker above the parity line. Inflation in the eurozone continues to move higher. In August, CPI rose to 9.1%, up from the July gain of 8.9%, which was a record high. Core inflation climbed to 4.3%, up from 4.0%. With both the headline and core readings exceeding the forecast of 9.0% and 4.1%, respectively, there will be additional pressure on the ECB to tighten policy more at an accelerated pace. The central bank has been slow to shift its accommodative policy, which was in place for years in order to support the eurozone economy. The ECB now finds itself playing catch-up with inflation, and is also far behind in the tightening cycle compared to other major central banks, with a benchmark rate of just 0.50%. Inflationary pressures remain broad-based, which means inflation is well-supported and unlikely to decline anytime soon. The eurozone inflation report comes just a day after Germany, the largest economy in the bloc, reported that August inflation jumped to 7.9%, up from 7.5% in July and nudging above the forecast of 7.8%. The central bank meets next on September 8th, and there is a strong possibility that the ECB could come out with guns blazing and deliver a super-size 75 basis point increase. A potential energy crisis in Europe continues to hover like a dark cloud, and the uncertainty over whether Moscow will weaponise energy exports remains a massive concern. The Nord Stream 1 pipeline has been shuttered for a scheduled three-day maintenance, but there are fears that Russia will find some excuse and not renew gas flows on Saturday. Any disruptions would likely push European gas prices even higher. In the meantime, the waiting game is on, with Western Europe on edge while it anxiously waits for the gas taps to be turned back on. EUR/USD has support at 0.9985 and 0.9880 1.0068 is a weak resistance line, followed by 1.0173
by OANDA
How The European Energy Crisis Is Affecting The Euro‍The euro-dollar exchange rate captures the value of the euro in terms of U.S. dollars. It’s one of the most widely tracked and significant global currency indicators, given that Europe is a major economic region with a strong currency, and many international financial transactions are denominated in euros. Moreover, the euro has been under pressure in recent months because of renewed concerns about European debt and fears that the European Central Bank may curtail its massive stimulus program too early (Injecting Billions of Euros into Eurozone debt - pandemic-era bond-buying program), which would make it harder for countries like Italy to service their debt. With all this in mind, let’s take a look at why the Euro Declined Against the US Dollar and hit a 20 Year Low recently. The European Energy Crisis Energy is a critical aspect of any economic outlook. As such, it is no surprise that Europe’s energy crisis has exacerbated its economic problems. Europe currently relies on Russia for approximately 50% of its natural gas. Europe’s heavy reliance on Russian gas is a major source of tension between the EU and Russia. The EU has placed sanctions on Russian energy firms, making it difficult for them to acquire equipment and technology they need to develop their energy infrastructure. That has left Europe with few viable options for alternative suppliers. Effects of EU Sanctions against Russian The EU’s Largest Member States Are Suffering The most significant economic problems can be found in Europe’s largest economies: Italy, France, Germany, and Spain. And those four economies are suffering because of the energy crisis, a weak euro, Brexit, and rising interest rates. The euro has been trading at a relatively low level against the U.S. dollar for years. However, the euro’s weakness has recently accelerated, as the European Central Bank adopted a more hawkish tone. That has made it more expensive for other countries to buy euros. Ergo, pushing up borrowing costs for euro-zone countries that are heavily indebted like Italy, France, and Spain. It has also made it more expensive for the European Union’s most powerful economies to service their debt. Political Instability It’s important to mention political instability because it has been an ongoing issue in Europe for years, particularly in countries like Italy, France, and Germany. That’s led to significant political uncertainty that has kept investors away and made it more difficult for these countries to get the strong economic growth they need to deal with their debt problems. The United Kingdom has been a major trading partner with the EU, The political environment surrounding the Brexit has led to significant economic uncertainty. Eurozone Growth Is Stagnant One of the most important economic metrics is GDP growth, which is the rate at which an economy is producing goods and services. Eurozone GDP growth has been relatively low for years, and it recently fell to a 17-year low. That’s largely due to lack of investment in major economies like France, Germany, and Italy, which are the most significant contributors to the eurozone’s GDP. When the energy crisis hit the EU, businesses stopped investing in plant and equipment necessary for growth. As a result, GDP shrank throughout the region. That’s forced the European Central Bank to take strong action, including negative interest rates and quantitative easing. However, those policies have had only limited success, as Europe is still facing an investment drought. European Union Debt Crisis The EU debt crisis emerged in 2010 when major economies like Italy, Spain, and Greece racked up unsustainable debt loads. Although it has faded in recent years, it remains a major issue, particularly for Italy and Spain. That’s because the two countries have large debt loads, and they are suffering from slower growth, making it harder to service that debt. That’s created significant economic uncertainty, as investors have been reluctant to lend to these countries. The European Central Bank has stepped in, making it easier for these countries to borrow, including buying their debt. However, the ECB’s actions have also made it easier for other EU countries to borrow, which has contributed to the rise in interest rates that are hurting France and Germany. ECB Tapering As the energy crisis worsened and economic growth was weak throughout the European Union, the European Central Bank boosted its monetary stimulus to stave off a deeper downturn. That included purchases of billions of euros of assets, including government bonds, per month. That quantitative easing program has been credited with helping Europe’s major economies, particularly Germany, avoid a full-blown economic crisis, as well as keeping the value of the euro low. That has also bolstered economic growth in other EU countries, like France and Italy, that rely on exports to Germany. However, with the energy crisis easing and economic growth gaining momentum, the ECB began to taper its QE program, reducing monthly purchases to just €30 billion. boosting the borrowing costs of the European Union’s larger economies. Oil Price Impact The energy crisis has also driven up the price of oil and other commodities. That has put additional pressure on the EU’s most significant economies, as their industries have been affected by higher prices. That’s particularly true for France and Italy, which have been among the hardest hit by the energy crisis and oil price surge. That’s made it more difficult for those economies to export goods and services, which has contributed to the stagnation of their GDP. Conclusion The European energy crisis has been a major problem for the EU. It has driven up the price of oil and gas, while making it more difficult for countries to import those resources. That has put the EU at an economic disadvantage when compared to other major regions, like the United States. That’s made it harder for the EU to recover from a variety of economic issues, including a low growth rate, high debt levels, and political instability. It remains to be seen if the EU can overcome its energy crisis and get back on track to economic prosperity. EUROZONE INFLATION RATE Important Upcoming Events that will cause volatility in the market
Editors' picks
by EQTSHARES
30
Euro rises to parity as ECB hints at 75bp hikeEUR/USD has edged higher today and is trading at the parity line. In the North American sesssion, EUR/USD is trading at 1.0019, up 0.57%. The US dollar has posted sharp gains against the major currencies, as Fed Chair Powell's hawkish speech at Jackson Hole left no doubt that the Fed will continue to tighten rates in its titanic battle with surging inflation. The euro, however, bucked the trend and posted strong gains on Friday but ultimately pared these gains, before moving higher once again today. The upward movement has been driven by hawkish comments at Jackson Hole from senior ECB members, including Isabel Schnabel, who is well-known for being a hawk. Shnabel said that the likelihood of high inflation becoming entrenched in expectations was "uncomfortably high" and argued that "central banks need to act forcefully". Latvian central bank Governor Martins Kazak was even more specific, stating that the ECB should be open to discussing 50 or 75 basis point moves. The ECB has raised rates but only to zero, well below the neutral rate of around 1.5%. This means that ECB policy continues to stimulate the economy, at a time when inflation and inflation expectations continue to move higher. The ECB will be hard-pressed to find the balance of raising rates without tipping the weak eurozone economy into a recession. Overshadowed by Powell's hawkish speech at Jackson Hole was a host of weak US releases. Personal income and spending data both missed expectations, while the Core PCE Index, the Fed's preferred inflation gauge, fell to 0.1% in July MoM, down from 0.6% in June and shy of the estimate of 0.3%. The weak numbers mean that the Fed may have to ease back on rate hikes, despite Powell's hawkish speech, as the data continue to indicate that the economy is slowing in response to the Fed's tightening. If upcoming releases indicate that the economy is losing steam, the dollar will be under pressure. EUR/USD has support at 0.9985 and 0.9880 There is resistance at 1.0068 and 1.0173
by OANDA
EURO bulls might take a little break and then go up towards 500!Euro bulls are having trouble to stay above 250 and I don't expect them to break up towards 300 early next week either, even though they could always surprise me. I expect them to reach 500, but I think its safer to wait for a re-test of parity first or for a clean break above 250, so they would actually manage to stay above. So for me the week will start in waiting mode. If we start with a downmove...I will wait for when it stops, if at the 100 level again or if it breaks below, towards parity.
Long
by from1tomillion
Euro unable to hold onto ECB gainsThe euro has reversed directions today and fallen below the 1.02 line. In the European session, EUR/USD is trading at 1.0188, down 0.42%. The markets were glued to the ECB meeting on Thursday, uncertain as to whether the rate lift-off would be a 25bp or 50bp hike. In the end, Lagarde & Co. went hawkish, delivering a 50bp increase. This was somewhat of a surprise, as the ECB has become more aggressive with obvious reluctance, prodded by soaring inflation which Lagarde previously dismissed as transient.  The Bank had provided prior guidance of a 25bp move at the meeting, but in the end, opted for a larger hike. With the 50bp increase, we bid goodbye to the ECB's negative rates, which have been a hallmark of its accommodative monetary policy. The Bank did not stick to its forward guidance and after the meeting, Lagarde announced that policy decisions would be made on a meeting-by-meeting basis, effectively ending forward guidance. What is fairly certain is that more hikes are on the way in the coming months, with the next meeting on September 8th. Predictably, the euro gained ground after the ECB meeting as investors were pleased with the move. However, the gains quickly dissipated. There are plenty of dark clouds hovering above the eurozone, the most important being the Nord Stream pipeline and the political crisis in Italy. Russia renewed gas supplies through Nord Stream yesterday, as scheduled, but only at around 30-40% capacity, similar levels before the pipeline closed for maintenance. There is certainly relief that gas is again flowing through Nord Stream, but it is tempered by fears that Moscow will not hesitate to play hardball with the EU and weaponise energy exports. With winter only a few months away and no end in sight to the war in Ukraine, the potential energy crisis facing Western Europe is not going anywhere. Italy, the number three economy in the eurozone, has been plunged into a political crisis as Prime Minister Draghi has resigned. An election is scheduled for the end of September, but in the meantime, Italy cannot pass the 2023 budget or access billions of euros from the EU's Covid-19 fund. The political instability will only exacerbate investors' concerns about the eurozone and is weighing on the euro. EUR/USD continues to test support at 1.0197.  The next support level is 1.0075 There is resistance at 1.0307 and 1.0429
by OANDA
EURUSD BULLISH OULOOK CONTINUESEUR is slowly gaining momentum against USD, after ECB raises borrowing cost, although the terminal rate of the currency remains unchanged and the risk for the Italian bond due to the political situation in the country. On the other hand, USD is giving up to the EUR due to the decline of treasury yields after some concerning data regarding factory activity and unemployment benefits. RSI's slow moving line is bouncing off the oversold zone and it's slow line is way above it. MACD histogram is also above the 0 line confirming bullish trend. If the trend continues, it might test its previous high at 1.06, but if we see a reversal, the currency might try to test its parity again. Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
Long
by legacyFXofficial
EUR/USD Holds On To Gains After ECB-Inspired VolatilityThe EUR/USD pair manages to close Thursday with a modest 0.5% gain at the 1.0220 area following a spike to fresh two-week highs as the knee-jerk reaction to the European Central Bank higher-than-expected rate hike announcement. The ECB decided to raise rates by 50 basis points – a 25 bp move was expected and priced in by markets – and announced a Transmission Protection Instrument (TPI), a new anti-fragmentation tool, aimed at supporting the effective transmission of monetary policy across the euro area. The EUR/USD initially rallied to a high of 1.0278 but failed to sustain momentum and dropped back to the 1.0150 area with the ECB President Lagarde’s subsequent conference. At the presser, Lagarde confirmed that the following hikes will remain data-dependent and that the rate normalization path will be approached “step by step, month by month and meeting by meeting,” which seemed to put a stop to the pair’s rally. Investors now focus on the US Federal Reserve rate decision next Wednesday, as policy divergence may extend the EUR/USD losses. From a technical perspective, the EUR/USD holds a bearish short-term bias and this week's bullish momentum seems to be coming to an end as the bulls got rejected three times by the 20-day SMA. Repeated failure to take on this hurdle could add pressure on the pair in the upcoming days. If the EUR/USD breaks decisively the 20-day SMA, currently at 1.0260, it could gain bullish momentum and target next resistances at the 1.0300 and 1.0350 levels. On the other hand, the next support levels are seen at the 1.0200 psychological mark, followed by the 1.0100 zone and 1.0000 ahead of the cycle low of 0.9952.
by Alex_Boltyan_FXAnalyst
Euro - Dollar pair after ECB session ... not so good newsThe ECB meeting has marked a rise in interest rates of 0.5 points. This has caused the EURO-DOLAR pair to rise to 1.0227. Although it will make the EURO stronger, there is economic uncertainty and complexity of the current European situation very difficult for it. In addition to no measurable productivity gains in recent times, the Italian community owes more than 700bn Euros to the ECB, and the ECB still has to provide 200bn for the Covid recovery fund. The current government of Italy will soon go into elections, whose polls show a rise and possible election of the right-wing side. This same side has policies against the EURO and the Eurozone. This makes the ECB's ability to act very limited, since Italy's exit from the EU could cause the bankruptcy of the ECB and the Bundesbank. Our perspective for the EURO-DOLAR pair is bearish.
Short
by jumper_stars_trading
Short term sentiment remains negative for EURGBPEURGBP - Intraday - We look to Sell at 0.8550 (stop at 0.8580) Although the bulls are in control, the stalling positive momentum indicates a turnaround is possible. The 200 day moving average should provide resistance at 0.8553. This is negative for short term sentiment and we look to set shorts at good risk/reward levels for a further correction lower. The hourly chart technicals suggests further upside before the downtrend returns. We therefore, prefer to fade into the rally with a tight stop in anticipation of a move back lower. Our profit targets will be 0.8460 and 0.8400 Resistance: 0.8600 / 0.8720 / 0.8845 Support: 0.8460 / 0.8400 / 0.8325 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.'
Short
by OANDA
Fade into the rally with a tight stop on EURJPYEURJPY - Intraday - We look to Sell at 142.40 (stop at 143.30) Although the bulls are in control, the stalling positive momentum indicates a turnaround is possible. Previous resistance located at 142.38. This is negative for short term sentiment and we look to set shorts at good risk/reward levels for a further correction lower. The current move higher is expected to continue. We therefore, prefer to fade into the rally with a tight stop in anticipation of a move back lower. Our profit targets will be 139.80 and 136.70 Resistance: 144.30 / 147.30 / 150.00 Support: 139.60 / 136.70 / 134.35 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.'
Short
by OANDA
EUR/USD -20/7/2022-• Descending channel on daily chart • Pair faced rejection at the upper bound of the channel • Italy political turmoil, Nord stream gas flow cut, Recession fears all add to the downside risk • Descending channel is a bearish pattern, expecting lower prices in the coming days/weeks • ECB meeting in focus, traders will be watching the rate increase, whether it is going to be 25 or 50 bps • 20 SMA acting as resistance • Levels below parity to be revisited
Short
by RamziAbouAbdallah-CMT
2
Euro soars but Nord Stream could spell troubleThe US dollar remains in correction mode and the euro has jumped on the bandwagon. EUR/USD is trading at 1.0231, up 0.88%. The euro breached the symbolic parity line late on Thursday, the first time that has happened in 20 years. EUR/USD dropped a bit further but has rebounded nicely since then and climbed about 250 points. A better-than-expected US retail sales on Friday provided cheer to the equity markets and risk sentiment has remained strong, pushing the safe-haven dollar lower. The ECB meets on Thursday, a highly-anticipated event in which the central bank will raise interest rates for the first time in a decade. The meeting will be live, with the markets still trying to determine if policy makers will opt for a modest 25bp hike or a more substantial 50bp move. With the benchmark rate at -0.50% and inflation continuing to accelerate, the ECB finds itself lagging well behind the inflation curve and additional hikes are expected in the coming months. ECB Governor Lagarde has made a hawkish pivot in recent months, but whether that will translate into a 50bp increase remains uncertain. Another key event on Thursday is whether the Nord Stream 1 pipeline, which provides Russian natural gas to the European market, will reopen. The pipeline has gone through a 2-week maintenance break, and the gas is supposed to flow, but Moscow has weaponised energy exports previously and could decide to do so yet again. They were reports today that the pipeline will resume activity on Thursday, but a report in the Wall Street Journal quoted EU Budget Commissioner Johannes Hahn as stating that he did not expect Nord Stream 1 to restart on time. If Moscow refuses to turn on the gas tap, the spectre of the EU scrambling for gas supplies could unnerve the markets and send the euro lower. EUR/USD is testing support resistance at 1.0197. Above, there is resistance at 1.0307 The pair has support at 1.0124 and 1.0075
by OANDA
EURUSD - Be careful for this week! ☼EURUSD - Be careful for this week! Hey no week ahead video this week. However, pay special attention this week we have ECB now imo it's the fact if they Hike, if they do you'll see bullish short term momentum towards upside. However, the amount doesn't matter because even if they do hike, most of EU countries are suffering when it comes to data front and of course inflationary factors which is global struggle but to mix it up a little the cherry on the top for the EU is Nord stream, its suppose to be turned back on this week and now if it doesn't and we get no rate hike expect the euro to weaken further, re-test areas of 2002-2000 areas go towards LT for that. Now that's this week review on what could happen to EUR and lastly PMIs. However, I'm not done yet - we have FOMC when that day comes CPI high the consumer sentiment high, the data front is bullish as well as retail sales it isn't bad data allowing FEDs having further room they could hike rates further, and of course we all know 75 basis point yes euro declines etc precious metals struggle you get the picture right but there was a moment of the market pricing in 100! Personally, I think yeah sure they could I think it's a little overboard but would be interesting as we have BOC do a nice surprise of that and that was brilliant price action. Now, I get it if they hike do not forget to look at EM currencies etc. There so many pairs including pairs like EURMXN, EURCAD & many others that have great opportunities. I personally won't be around to trade this week but I will be keeping an eye on the market. ☼ Have a great week ahead and trade safe! ☼ TJ
by Trade_Journal