Strong markets in Europe maintain risk-on sentimentMarkets in Asia and especially in Europe started September strongly after higher-than-expected inflation in the eurozone and very optimistic comments from ECB Vice President Luis de Guindos, who said that the eurozone economy is growing faster than the ECB expected, hinting at an upward revision of the central bank's growth forecast. On the downside, German retail sales disappointed in July, falling 5.1% month-on-month. Eurozone manufacturing PMI was lower than expected, but remained near record levels. August, normally a complicated month for the stock market, saw several record closes for the S&P 500 and Nasdaq 100, with US equities pointing to a positive performance on the first day of the new month. The important 10-year US Treasury yield rose well above 1.3% again (currently at 1.32%). The USD remains weak ahead of the US jobs report in focus on Friday. Oil prices remained in a sideways range ahead of today's OPEC+ meeting. Ethereum broke through $3,500, the highest level since May 18. Bitcoin continues to trade in the $47K - $48K range.
Despite rising expectations that central banks will gradually move away from pandemic-era stimulus programs, markets continue to rise, showing that investment banks remain confident that the sustained rise in the stock market will continue. Statements from ECB officials showed that the ECB is optimistic about economic developments in the eurozone, but also that the conditions for a gradual withdrawal of stimulus measures are almost met. Higher 10-year US Treasury yields can be seen as an indicator that US investors also believe that economic growth will continue for longer. September was the worst month for equities in the last two decades, and we also see hedge funds preparing for a reversal. For now, markets remain optimistic, waiting for more clues on the Fed's plans for the coming months. The ECB's optimistic comments have eased growth concerns for now. Risk sentiment remains positive, supporting risk-sensitive currencies such as the AUD, NZD and emerging market currencies. The rise in the EUR is likely to continue as expectations rise that the ECB has started internal talks on scaling back stimulus measures, which the ECB will then report on in detail at the upcoming ECB meeting (on Sep 9).
Ecb
EURJPY itching to resume bull trendUpdates coming here after the Jackson week
Bearish JPY and looking to play versus EUR . Actively adding here as the l/term uptrend is set to resume, we can look to target fresh highs here at 134.1x and continue to expect JPY to underperform in Q3 and Q4.
Indeed the break is signalling in advance that the direction is still up. Price action above 129 is proving interesting, the break of 'B' will define whether there is a chance of another pullback or the move is direct and imply the base has materialised.
EURUSD bearish re-introductionHere we see the price of the EUR/USD pair recently have retested a very relevant resistance forming a blueprint of a descending channel. Within the channel we see a 5-wave (ABCDE, rising wedge respect the same resistance level. A confirmed breakout from this triangle would see the price reach the end of the channel.
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ridethepig | The base is fixedA quick round of illustrations to review the swings in euro...
The idea of the swing; we are mapping bids and offers, no more no less. Two battlefields, the wings are what we attack on and the centre is where we begin to clear (into thrusts and etc).
Lets start with the Yearly chart for our macro direction:
Very clear the base has been attacked previously many times, lulling sellers into capturing before trapping them on the return. Eurobonds / debt mutualisation has fixed the base in 2020, covid was for Angela Merkel what Britain was for Alexander Hamilton.
Now lets check the Monthly in Euro first and then Dollar:
Both are very clear with direction and the developments that have arisen. The new weakness in dollar should be energetically got at while the exploitation of the risk on continues until all that is left in the endgame. We still have another few months of riding the pig and marching triumphantly forward before we need to review charts.
On the Daily, 1.176x - 1.173x is acting as strong support. Buyers could overcome all their difficulties with a break of the volatility triangle/compression. Under no circumstances should buyers surrender while the lows are still holding. You can see how much damage is there to be done, clearly an expensive area to be selling into, while a cheap and open file to be buying into. To the topside, targets coming into play at 1.198x, 1.225x and 1.250x.
Thanks all for keeping the feedback coming !!
EUR/USD weekly outlook: NFP charges the greenbackHello traders and happy Friday. It's time for our weekly outlooks of major FX pairs.
First on the list is EUR/USD. The pair moved sharply lower today after strong NFP numbers from the United States (943K vs 870K expected) helped markets to reprice their Fed tapering expectations. Hawkish comments from the Fed Vice-Chairman Richard Clarida that the US is well on track to start policy normalization also supported the US dollar, which is now threatening the 1.1750 support level in the pair.
The rapid spread of the Delta variant and its impact on the global economic recovery prospects could also continue to underpin demand for the safe-haven dollar. In combination with the ultra-loose ECB, this doesn't look good for the pair.
The euro lacks important reports next week (except the German ZEW, expected lower). In the US, markets will be looking at CPI and PPI reports (both expected slightly softer), although market reaction might be rather muted in light of the upbeat NFP release.
As noted earlier, Fed's Clarida hawkish comments and a strong US labor market provided some meaningful support to short-end UST yields, which are now printing a strong bearish divergence with short-end eurozone yields. Despite the cautious tone of Fed's Powell at the last FOMC meeting, I expect that the Fed could announce a tapering timeline at the Jackson Hole Economic Symposium in late August (26-28).
And here is an overview of US Treasury yields for the last four months. The recent spike in short-end yields (bear flattener) underpins the market's cautious outlook on the global economic recovery in the long-term - another positive sign for the safe-haven dollar.
Risk reversals don't provide many insights for the next week, although options expires point at a modest upside risk. Large options expiries can act like a magnet for the spot price. Most of the time, the US dollar tends to give back some gains after a strong NFP release, so be prepared for a slight upside correction next week.
The daily chart shows a falling wedge formation but the apex looks still far away (fourth leg is forming.) The downtrend is now well in play with the lower range support (1.1750) acting as a major hurdle for further downside. Given the common USD weakness on Monday after a strong NFP release, and the pair printing almost 2xATR today, a pullback to the upper 1.17xx area (50% pullback of the recent down leg or 50% of the post-NFP range) could provide a better selling opportunity for shorter-term traders (1-hour chart).
The 1.17 level acts as a round-number and wedge-support target to the downside.
== SUMMARY ==
I remain bearish on EUR/USD and look for attractive selling opportunities on strength.
ECB Meeting And Its New Inflation Target (23 July 2021)New monetary policy strategy.
Earlier this month, the European Central Bank (ECB) reconvened its policy review that was postponed since last year due to the COVID-19 pandemic. During the review, the central bank revised its current goal of achieving an inflation level of “below, but close to 2%” to the new goal of achieving 2% inflation with overshoots allowed. This new inflation target is symmetric, meaning to say that inflation falling below or rising above the 2% target are both equally undesirable.
However, knowing that it is unlikely inflation will be constantly maintained at the 2% target, slight deviation from 2% temporarily is still acceptable by the ECB. But if inflation were to deviate from that target by a significant amount for a sustained period of time, the central bank will carry out the necessary actions to address it.
Revised forward guidance.
During the monetary policy meeting yesterday, the ECB held its interest rate and quantitative easing (QE) unchanged. The central bank’s President Christine Lagarde said that no discussion on quantitative easing was carried out. In response to the newly adopted inflation target, the ECB has revised its forward guidance on interest rates.
“In support of its symmetric two per cent inflation target and in line with its monetary policy strategy, the Governing Council expects the key ECB interest rates to remain at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at two per cent over the medium term. This may also imply a transitory period in which inflation is moderately above target.”
Simply put, the central bank will consider an interest rate hike only when inflation is seen to be reaching the 2% target way before the end of its projection horizon and is deemed to sustain for the rest of the projection horizon. Based on the ECB’s economic projection material, the projection horizon is defined to be three years.
With the revised forward guidance, the ECB is now seen to be more accommodative for a longer duration. Looking at the ECB’s quarterly economic projections released in June,
Inflation Forecast
2021: 1.9%
2022: 1.5%
2023: 1.4%
we can see that the central bank’s inflation expectation is still quite a distance from 2%. During the press conference, Lagarde also highlighted that the ECB is expecting “inflation to rise over the medium term” although it is still below the 2% target, while “longer term inflation expectations have increased” but are some distance away from the target. Lagarde also mentioned that the recent rise in inflation in the eurozone is largely due to temporary drivers such as higher energy prices and base effects from the strong decline in oil prices. With the persistently low inflation in the eurozone, it is unlikely the ECB will carry out a rate hike in the near future.
EURUSD before ECB | What to expect? The analysis from yesterday is going as expected and it confirms the direction that we were looking at.
And that gives us an opportunity to look for short positions today!
But there are a few conditions!
Do not enter a trade now. We're still waiting for ECB interest rate decision. That will cause volatility in the market.
It is also very likely that there will be some misleading moves and that will be our moment to make an entry.
We are going to be watching out for a certain price reaction in the selling zone and in case we see engulfing candles or long wick candles, then we're going to be looking for an entry.
EURUSD should not rise above 1,1880, otherwise this scenario wouldn't be valid!
If we see price pushing off of the zone then we could expect another downside move to 1,1700!
EURUSD short trade Idea |Target 1.1700Trade idea based on Fundamentals & price Action
With risk management you will never loss..
Kind regards;
Ridethemacro
EURUSD eyes monthly resistance ahead of ECBEURUSD holds onto the previous day’s bounce off three-month low, though with a lesser pace, towards a downward sloping resistance line from June 25 ahead of Thursday’s European Central bank (ECB) monetary policy. Although the policymakers are expected to stand pat, comments over the economic outlook will be the key to break the immediate hurdle surrounding 1.1810. While the sustained breakout could recall the 1.1880, any further upside will be less convincing until crossing 1.1920 resistance confluence including 61.8% Fibonacci retracement level of March-May upside and 200-day EMA.
Meanwhile, 1.1770 and the latest low of 1.1750 could entertain the EURUSD bears during the fresh downside. Following that, the yearly bottom surrounding 1.1700 will be crucial. Should the pair sellers remain dominant past the 1.1700 threshold, November 2020 lows near the 1.1600 round figure will be in focus. Overall, EURUSD remains in a bearish trajectory but the ECB needs to speak dovish for the trend to last.
EURCHF Medium-Long Term Projection ECB will be the most concern this week because likely to change MonPol on Thursday when press conference. According to bloomberg "ECB Seen Changing Words Now & Bond-Buying Later With New Strategy". So, talk less do more & Pricing In right now because technically & fundamentally are very appealing..
What do we expect from EURUSD?EURUSD is currently in a downtrend on the H1 chart. We sent out multiple selling opportunities in this trend. Now we expect another downside move but...
Before that we have ECB Interest Rate Decision. Those news could affect price by temporary taking price back to a higher levels.
Any of those upside moves should end below 1,1880 in order for price to remain in a downtrend.
And at this moment of price going back to the upside we could find the best risk to reward ratio trades! If price reaches 1,1800-30
and it then gives us a rejection signal then that will be a perfect entry opportunity. Before that all we're gonna be doing is wait and trade the other instruments.
In case of price continuing lower, next target is 1,1700!
Portfolio: Long EURGBPI am going long EURGBP at 86.00 with a stop loss at 85.20 and a target of 88.60 using 2% of capital.
I have already articulated in both the latest chart packs that we are seeing pressure on USD and US10Y. This is a good example for us to use to highlight the slightly more cautious tone in GBP.
This selloff looks like it has run out of steam around 0.853x and should begin accelerating towards 2021 highs at 0.922x once we break the channel resistance ahead.
ECB & Fed: Checking The TurnWave 3 - Chapter I
Introduction and general comments
After clearing ECB & FED it is well known that hikes are cooking very creditably and the monetary side appears to be quite helpless in the endgame. The most well-handled analogy from poker is "checking the turn", both Powell and Lagarde showcased the ability to play this with skill. It may be in the nature of things for markets to gather first plenty of participation in the opening, but this problem for bears must be tackled as soon as possible. You must be aware that from the very start of June we have seen one way traffic for sellers, there are now stale leftovers compared with the feast that is cooking for buyers. The realisation will soon kick in that not enough time has elapsed for sellers to pack and defend the ladder appropriately, meaning a material occupation of control from buyers will trigger a slingshot higher as they cover quickly.
Example 1 :
Buyers were the most important actor present during the Covid Compression. They headed for the apex and at the same time eurobonds protected the base and propelled the swing into 1.20+.
Example 2 :
Here too from the zoomed out picture we can see how buyers control the flows and choose a 5 wave sequence, first targeting the 1.20xx main area which we cleared in the tweet, and second, the 1.25/1.26 area which can now be made more enterprising in Q3.
The next move in play here is an impulsive wave from 1.185x => 1.25xx/1.26xx. Since the immediate expectation of inflation is now being forced via Fed, this is an exchange the ECB will lose. Breaking below 1.17xx will imply an imbalance between sellers and buyers.
Positional PlayA quick update to the Euro chart here after clearing the well known ECB positioning. This was the last thing we needed to mark a significant floor; anticipation of 1.176x (Strong Support) holding has clearly applied and for those building their own positions internally, protection is defined below March lows (1.168x) while targets above come into play at 1.217x and 1.250x.
Admittedly we overshot the wave (2) slightly more than I thought, however, as has already been mentioned in the previous chart(s), we were neither tracking buyers nor sellers, rather what was essential this time around in my books, was macro positioning. What was needed was a fresh and energetic low to draw participants in before enough time elapsed for the fundamental side to materialise. If we set aside for a moment, a quick recap of the previous chart for the new readers here, this is what we were previously tracking, to set into motion the "teeing" off.
So the positioning players now have picked their sides, buyers clearly are looking to make a freeing swing towards the 1.25xx handle and post their profits for the year, while sellers are now poorly positioned in terms of risk:reward, and those looking to breakdown need it to happen in such a way as to open the next leg lower in EURUSD in 2022 and beyond. In saying this, we must not get too far ahead, the move here we are tracking is a slingshot towards the topside with Dollar under severe pressure once more.
Eight-month-old support line test EURUSD bears on ECB dayEURUSD bounces off an ascending support line from November 2020 amid oversold RSI during early Thursday. However, sellers remain hopeful as MACD keeps flashing bearish signals ahead of the ECB’s special meeting. The bloc’s central bank is widely expected to repeat support for easy money policies, likely extending the latest corrective pullback towards a two-week-old resistance line near 1.1870. However, any further recovery will be checked by the 200-day EMA surrounding 1.1930, as well as a four-month-long horizontal resistance near the 1.1990–2000 area.
Alternatively, any surprise moves, coupled with the further covid-led risk-off mood, could drag the quote below the key trend line support around 1.1780. The same will drag EURUSD prices to the yearly low near 1.1700 before highlighting the November 2020 low of 1.1602. It’s worth noting that the US dollar’s safe-haven allure is likely to keep the major currency pair pressured even if the counter-trend traders benefit on Thursday.
EUR/USD for July 05: FOMC Meeting Minutes Key for DirectionEUR/USD Daily Update for July 05. Here is what you need to know to trade the pair today.
FUNDAMENTALS:
A strong gain in jobs but rising unemployment rate and unchanged wages in the US led to some selling pressure in USD, but profit-taking ahead of the extended weekend and US holidays was likely the key driver of US weakness on Friday. Look for a short-term correction, but the direction for USD will likely continue to be bullish.
In the euroarea, wories about the new Delta virus variant and softer German PMIs could extend the downtrend in EURUSD. The FOMC Meeting Minutes on Wednesday will be a key event for the future direction of the pair, as markets will scrutinize how Fed hawks and doves are arguing their cases for a potential rate hike in 2022. For now, there is little reason for markets to lower their Fed hiking expectations.
Latest Headlines:
USD News:
US Dollar Index remains on the defensive near 92.20
US Dollar Index Price Analysis: DXY probes rising wedge breakdown above 92.00
US inflation expectations fade recovery moves
Fed and ECB events to keep an eye on this week
EUR News:
EUR/USD to resume its falls amid covid worries and a rethink about the Fed's moves
Eurozone Sentix Investor Confidence improves to 29.8 in July, misses estimates
Eurozone June final services PMI 58.3 vs 58.0 prelim
Germany Markit Services PMI came in at 57.5, below expectations (58.1) in June
Germany Markit PMI Composite below expectations (60.4) in June: Actual (60.1)
Upcoming Market Reports:
Here are the most important market reports for EUR/USD to follow in the coming days (all times are UTC timezone):
Monday at 12:00: USD Bank Holiday
Tuesday at 09:00: EUR ZEW Economic Sentiment (Expected: 79.0 , Previous: 81.3 )
Tuesday at 09:00: EUR German ZEW Economic Sentiment (Expected: 75.0 , Previous: 79.8 )
Tuesday at 14:00: USD ISM Services PMI (Expected: 63.9 , Previous: 64.0 )
INTERMARKET:
2-year yield differentials point at further downside potential in the EURUSD pair.
SENTIMENT:
CoT:
The net positioning in EUR among leveraged money remains bearish, although this category of traders reduced their bearish bets in the previous week. USD positioning (as measured by the value of total contracts) is less bearish after the Fed adopted their hawkish stance, although the majority of traders are still short on the currency. Watch out for a short-squeeze here. Positioning is bearish for EUR/USD.
TECHNICALS
The pair broke above a longer-term bearish trendline on the 1-hour chart, although on quite light volume. The overall trend remains bearish until we see a break above the 1.1974 level, which also acts as a key resistance to the upside.
Other levels to watch:
Major resistance: 1.1974
Minor resistance: 1.1900-10 (61.8% Fib)
Minor support: 1.1852
Major support: 1.1805 (last week's low)
== SUMMARY ==
From a fundamental standpoint, the pair has potential to move towards 1.17 during the week, but a short position can only be established if we get a clear signal that the bearish trend is resuming.
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EUR/USD: How to Trade the Next Week 📈Hi traders. After we closed our last EURUSD trade in profit, it's time to look for trading opportunities in the coming week. Here is a complete FIST analysis for the pair with some tips on how to trade the next week.
FUNDAMENTALS:
EUR traded with a heavy bearish bias last week as markets supported the USD ahead of the US labor market report, the weekend, and the US holiday next week. Now that the NFP came in stronger than expected, the EURUSD pair could see further weakness despite the rise in US unemployment rates and pressure on wages.
The FOMC meeting minutes, due on Wednesday, will likely attract attention as markets will follow how hawks and doves are arguing their cases, especially the seven hawks who see the first rate hike in 2022.
In the euroarea, the main highlights for the next week are Sentix and ZEW sentiment reports. Although there are some factors that could lead to EUR strength, the dovish stance of the ECB is likely to provide further selling pressure in the currency, at least until we see some strong hard data from the eurozone.
Latest Headlines:
Here are the latest news headlines for both currencies.
USD News:
- US dollar moving to new lows. Now the weakest of the major currencies
- US factory orders for May 1.7% versus 1.7% estimate
- US stocks are opening higher after less scary jobs report
- US Dollar Index retreats from tops post-Payrolls, back around 92.40
- US Dollar Index Price Analysis: Next on the upside comes in 93.50
- USD needs a much larger surprise on NFP to sustain further gains – TDS
EUR News:
- EUR/USD stages limited rebound after US NFP data, stays near mid-1.1800s
- EUR/USD bounces off fresh lows, retakes 1.1850 post-NFP
- EUR/USD Price Analysis: Looks offered and could slip back to 1.1800
- EUR/USD: Key resistance at 1.1976/2001 to cap even on NFP miss – Credit Suisse
- Eurozone May PPI +1.3% vs +1.2% m/m expected
- EUR/USD stays weak, approaches 1.1800 ahead of Lagarde, NFP
Upcoming Market Reports:
USD: ISM services (Jun), JOLTS jobs openings (May), FOMC Minutes, Initial jobless claims (Jul), Wholesale trade sales, inventories (May)
EUR: Services PMI (Jun), Sentix investor confidence (Jul), ZEW survey (Jul), Retail sales (May), German Industrial Production (May), German Trade, current account (May)
INTERMARKET:
Although the USD and UST yields had a sluggish performance on Friday following the labor market numbers, I feel that US yields will remain supported throughout the next week (the FOMC meeting minutes will be a key event to follow for this.) The US weakness on Friday was likely the result of profit-taking ahead of the US Independence Day.
German/US yield differentials diverged slightly from the exchange rate to the downside.
TECHNICALS
Price-Action:
The EURUSD pair traded with a strong bearish bias in the last week within a well-defined downtrend. On Friday, the price closed after a short retest of a falling trendline, where sellers started to join the market. Another horizontal resistance (Thursday high) can be seen just above the trendline at 1.1885.
Volume:
Trading volume spiked on Friday after the NFP report, but the result in terms of market movement was rather weak. A strong bullish candlestick formed just before the market close on low volume and low liquidity.
== SUMMARY ==
EUR/USD is mildly bearish with the potential to stretch below the 1.18 level during the next week. I would change my short-term bearish bias if the price breaks above the trendline and horizontal resistance (1.1885).
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EUR/USD FIST Update - June 28Hi traders, here is a full update for EUR/USD. 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!
TECHNICALS
The EURUSD pair broke below a long-term trendline on the daily chart following the FOMC meeting, with the correction losing steam at the broken trendline, which now acts as resistance.
The 1-hour chart shows a push below a short-term trendline in a pattern that resembles a bearish wedge, signaling further weakness.
Volume:
The daily bars that form that corrective move occurred on lower volume. The strong bearish candlestick on the 1-hour chart that formed today (high volume), as well as the following bullish 1-hour candlesticks (high volume but weak movement) are a bearish signal for the pair.
Levels to follow (Liquidity):
Important resistance: 1.1975 (last week's high)
Important support: 1.1900 (daily low and round-number support)
FUNDAMENTALS:
Latest Headlines:
USD News:
US Dollar Index looks for direction around 91.80
Fed's Rosengren: You don't want too much exuberance in the housing market
US air strikes against Iran-backed militia in Syria and Iraq
EUR News:
ECB's Holzmann: PEPP will end when virus emergency is over
ECB's Holzmann: We don't know yet what price path will bring
EUR/USD stays consolidative near 1.1940
Resistance at 1.1998/1.2007 to cap for a move back to 1.1847/24 – Credit Suisse
Risk of second-round inflation effects remains limited
Upcoming Market Reports:
Here are the most important market reports for EUR/USD to follow in the coming days:
Tuesday at 07:03 (GMT): EUR Italian Bank Holiday
Tuesday at 14:00 (GMT): USD CB Consumer Confidence (Expected: 118.9 , Previous: 117.2 )
Wednesday at 09:00 (GMT): EUR CPI Flash Estimate y/y (Expected: 1.9% , Previous: 2.0% )
Wednesday at 12:15 (GMT): USD ADP Non-Farm Employment Change (Expected: 555K , Previous: 978K )
Wednesday at 13:45 (GMT): USD Chicago PMI (Expected: 70.2 , Previous: 75.2 )
Wednesday at 14:00 (GMT): USD Pending Home Sales m/m (Expected: -1.1% , Previous: -4.4% )
Wednesday at 14:30 (GMT): USD Crude Oil Inventories (Expected: , Previous: -7.6M )
INTERMARKET:
Yield differentials in the short-term: Bearish
== SUMMARY ==
Fundamentals and technicals point at further weakness in EURUSD. We remain bearish on the pair.
EURAUD Been watching this pair for a while. Decided to share my idea with the community.
Trade safe! Trade Wise!
EURAUD Short- Respect For Topside Liquidity- ECB TodayOnce again EURAUD has respected the top side only taking out the former highs before showing weakness and beginning to roll over. This offers a great RR set up and the prevailing market sentiment suggests a recovering Dollar and a stronger bond market out of the gate this morning which perhaps suggests continued weakness in the Euro. The German Buba report will be in an hour and could create some smaller time frame volatility in the Euro as projections are announced. Later today the head of the European Central Bank will be speaking and will likely touch on some important points. Trade accordingly. Another thing to consider, is if there is considerable upside momentum, marketing in to a buy order. This could offer a quick scalp if there is enough pressure with plenty more liquidity to be chased down on the topside.
#EURCAD: Bottom's inI suspect the $EURCAD cross pair is reversing in the weekly timeframe here, we might see a substantial rally as oil could be peaking here, and the $Euro is oversold.
The setup calls for a potential rally to 1.53, with risk down to 1.47 if the trade fails. Ideally you try to get in on dips after the market is open, keep an eye on price action for an entry. Alternatively you can average in during the day to not be left out in case there's no retrace.
Cheers,
Ivan Labrie.
ridethepig | EURCHF into 1.14The concept of this complete or at least partially supported euro structure
In this swing, there are three actors:
1 . the support which is acting as a pivot
2 . the opposing resistance which is being targeted
3 . the breakout trigger which will provide momentum
The breakout here is attacking the soft resistance at 1.14 which is +/- 4% from current levels and 1.20 next year. So buyers are standing in deep value levels with the two targets mentioned. The structure underneath is generally of royal blood, buyers put a lot of time into the plumbing of these levels and are not fearful of hiding behind one another - thus the short space between strong and soft support.
If this lacks the mobility to break out and is an absolute chop fest then we can make the executive decision to make no move of any sort. If on the other hand, the momentum kicks in as I am expecting, we can move to 1.14 with little pushback over the coming weeks and months. The diagram illustrates the long-term map.
Here the flow towards 2018 highs is underway with the European rebound and we are only "partially" into wave 3. This means we can confidently lean on the macro direction as Swiss outflows are set to continue with CHF cooked as a low yielder for the next few years. For those tracking the SNB reserve activity closely, they are going to get a lot more active in Q3 (a lot similar to Q1).
EUR/USD FIST Analysis for June 14: What you need to knowHi traders, here is an update for EURUSD for today and the current week. We analyzed fundamentals, yields, sentiment, and technical levels and showed how we would trade the pair. Enjoy!
FUNDAMENTALS:
Top Headlines for June 14:
US Dollar Index clings to gains around the 90.00 region
US President's infrastructure spending proposal in focus
US Dollar Index Price Analysis: DXY extends bounce off nearby support line to tease 90.00
EUR/USD to bask a recovery as the inflation monster is not as scary as it seems
France Current Account above forecasts (€-2.7B) in April: Actual (€-1.4B)
France Imports, EUR: €46.851B (April) vs €46.05B
Upcoming market reports:
Date - Report - Forecast - Previous - Impact
0 2021-06-15 12:30 UTC USD Core Retail Sales m/m 0.4% -0.8% High
1 2021-06-15 12:30 UTC USD Retail Sales m/m -0.6% 0.0% High
2 2021-06-15 12:30 UTC USD PPI m/m 0.5% 0.6% High
3 2021-06-15 12:30 UTC USD Core PPI m/m 0.5% 0.7% Medium
4 2021-06-15 13:15 UTC USD Industrial Production m/m 0.6% 0.7% Medium
5 2021-06-16 14:30 UTC USD Crude Oil Inventories X -5.2M Medium
6 2021-06-16 18:00 UTC USD FOMC Statement High
7 2021-06-16 18:00 UTC USD FOMC Economic Projections High
8 2021-06-16 18:30 UTC USD FOMC Press Conference High
9 2021-06-17 12:30 UTC USD Unemployment Claims 360K 376K Medium
10 2021-06-17 12:30 UTC USD Philly Fed Manufacturing Index 31.2 31.5 Medium
There is no high-impact or medium-impact news scheduled for EUR this week.
INTERMARKET:
EURUSD is trading well in balance with 2-year yield differentials. However, the US yield curve has shown falling yields for all maturities in the last 5 trading days, which could further increase selling pressure in the USD (bullish for EURUSD). The USD index has also failed to break above the weekly 90.60 resistance this morning.
Currency Strength Index:
While not a top-performer, EUR is trading near daily highs as positive risk sentiment generally favored risk currencies this morning. The US dollar has entered a short-term downtrend, signaling further upside potential for EURUSD.
TECHNICALS
Price-Action:
The EURUSD pair found support at the 61.8% Fib level of the latest daily impulse move and formed a double bottom pattern on the short-term chart.
Buyers started to push the price higher as the USD gave back some gains from Friday. The gains were made on relatively low volume, signaling that selling power and/or liquidity was quite low.
== HOW TO TRADE? ==
We favor a long position in EURUSD given the strong support at the 61.8% Fib level and the double bottom pattern.
Lower inflation fears and a Fed that could be on hold on Wednesday (potentially further postponing quantitative tapering) could provide a strong bullish move in the EURUSD pair.
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