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Euro-dollar

7th July 2021: FX Wrap - EURTrading action in the single currency was mostly focused around the 1.18 handle, with technicians positing that a failure to hold this level will eventually open the door to 1.17. SocGen’s strategists note that EUR/USD has recoupled with rate differentials in recent months; one implication is that the 2y2y rate differential suggests that the currency is more likely to trade in a directionless range for a while, saying that it was not hard to imagine the gap between Funds and the ECB Deposit rate widening to over 2% as monetary policy normalises, the last time that happened, it helped trigger the EUR/USD fall from 1.27 in 2018-2019.
by thunderpips
3
We consider re-entering EURUSD longs -NomuraWe were surprised by the USD strength over the past week, despite the softer-thanexpected US May core PCE release. We believe this has mainly been driven by EUR weakness, reflecting market anxiety over the pace of US Fed policy normalization versus that of the ECB, FX positioning and the marginal widening of US-EU spreads. Key nearterm risk events, beyond the US June payrolls report (asymmetric risk skewed towards a stronger USD, as softer release would likely be viewed as temporary), include the ECB’s strategic review meeting (6-7 July). Following the review, an announcement (largely expected) of a possible 2% inflation target, versus the current target of “below, but close to 2%”, is possible. Potential dovish surprises include the ECB shifting to an average inflation targeting framework, which would further raise policy divergence concerns between the ECB and Fed. We note that Fed speakers over the past week have broadly highlighted tapering talks; some state 2021 as a possibility, some highlighted a rate hike in 2022, inflation has been higher than expected (most still think transitory), and they believe labour market strength will likely resume around September. As for key US focus points after the June payrolls release (due today), the next Fed policy focus points will be on the speech by Raphael Bostic (8 July, SGT) who previously stated that there could be a rate hike in 2022. The release of the 16 June FOMC minutes (8 July, 2am SGT) will also be watched for clues around tapering (timing and form). Overall, the Fed policy tightening theme continues to dominate and, without notable downside surprises in key US data ahead, there looks to be some risk that USD may continue to strengthen (we expect higher USD/JPY with risk conditions still holding stable; lower EUR/USD in the short term). At this juncture, the market is still slightly short USD, while there does not appear to be any significant overpricing of Fed tightening/inflation risks as reflected in Eurodollar futures, inflation breakevens, and zero coupon inflation swaps. STRATEGY: EUR/USD has moved lower than nominal or real rates spreads would imply, suggesting USD strength has slightly overshot in the short term; however, sentiment is definitely USD bullish, which is hard to ignore. Friday’s payrolls number is a material risk to the short-term price, but we are still of the view that FX cannot ignore the substantial acceleration of European equity inflows for very long. Still, markets are giving a signal that a global growth slowdown is in the pipeline (lower copper prices, lower US equity cyclicals versus defensives) and, along with the likelihood of Fed hikes next year, the USD appears to be in vogue. The mixed messaging from flows and mobility data versus price action has prompted us to take stock of what’s going on and is why we’ve turned neutral EUR/USD for the past week and short EUR/GBP. We have 1.18 in mind as the next level where long EUR/USD positions are attractive once again with 1.17 acting as a strong support via the end-March low. However, as NFP approached, we remain neutral on EUR/USD, as we await better levels to consider longs.
by thunderpips
1
EUR: Time for some better hard data in EuropeFundamental bias: Mildly Bearish *EUR/USD remains fragile and the better-than-expected NFP headline number will keep open the possibility of a drop to 1.1700. Expect the FOMC minutes on Wednesday to have a big say in how low EUR/USD goes this coming week. *For the week ahead, the European data calendar is very light, with focus on more investor confidence surveys (Sentix Monday, ZEW Tuesday) and on Wednesday the release of the European Commission’s summer forecast round. These presumably should see growth upgrades. Germany will on Wednesday see May industrial production – expected to rebound in line with the better sentiment indicators. Some improvement in the hard data could provide the euro with a little support.
by thunderpips
8
EUR-USD Bearish Bias! Sell! Hello,Traders! EUR-USD is now trading in a downtrend And we can see that a falling opening wedge has formed And even though the support to the left is not yet broken I've got a massive bearish bias And I think that we will see bearish continuation on EUR-USD Within this wedge and the target might be way lower that the one on the chart Because the nearest support is so far away NOTE: IF the wedge is broken to the upside, the setup is invalid! Buy! Like, comment and subscribe to boost your trading! See other ideas below too!
Short
by TopTradingSignals
13
EURUSD - 2021-2022 FX Forecasts from investment Bank BarclaysMeasured Dollar (USD) Gains as Markets Monitor Global Rebound Barclays expects that the global economic recovery will strengthen over the next year with supportive fiscal and monetary policies. There will, however, be potential disruption if inflation is not transitory. Overall, the bank also expects that the dollar will not be weakened by stronger global growth as the Federal Reserve will shift towards a more restrictive policy. Barclays expects the dollar to be held in relatively tight ranges as markets wait for further evidence on how long supply-side issues continue to distort activity. “More sustained inflation would raise market expectations for Fed action to address it, especially if inflation expectations appear to be becoming entrenched.” A more aggressive Fed stance would underpin the dollar, although Barclays notes that the US currency is still overvalued at current levels, limiting the scope for further gains. Barclays expects the Euro-zone economy to recover strongly, but this represents a catch-up rather than genuine out-performance. The bank also expects that the ECB will keep more hawkish voices within a minority; “We expect the core of the Council to hold firm and keep policy ultra-loose for the foreseeable future.” This expansive monetary policy will continue to limit the scope for Euro appreciation.
by thunderpips
EUR: ECB remains one of the last doves standingFundamental bias: Mildly bearish EUR/USD continues to retrace the FOMC induced sell-off, but no-one expects the EUR to lead this recovery. The ECB has made it clear it does not want to be dragged into premature tightening and we should hear that message in the week ahead from a whole host of ECB speakers, especially from Christine Lagarde. The data focus will be on the first look at the June inflation data – but consensus expects headline and core to remain subdued around the 1.9% YoY and 0.9% YoY respectively – hardly a trigger for an ECB change of heart. We’ll also see June PMIs across the whole region. These should echo the surprisingly resilient flash estimates we have seen so far – suggesting supply chain disruption might not be as bad as feared. Also look for French regional elections this weekend. Last week’s vote had little impact on markets, where a low turnout saw support for both Macron and LePen marginally decline. Recall France sees Presidential elections in April 2022.
by thunderpips
EUR: Hiccup in the European manufacturing sector?Fundamental bias: Mildly bearish Price action has all the hallmarks of a short, sharp position adjustment – suggesting the bulk of the correction may have occurred. Yet we feel Fed speak could see EUR/USD correct a little further lower this week. Look out for speeches from ECB President Christine Lagarde and board member Isabel Schnabel – likely to repeat remarks by Chief Economist Philip Lane distancing the central bank from any early hawkishness. In terms of the data calendar, the eurozone focus will be on the flash June PMIs and the German Ifo. We noticed this week that the Ifo institute cut their 2021 German GDP forecast to 3.7% from 3.3% on the back of supply bottlenecks. Let’s see whether manufacturing sentiment sours a little in the June surveys.
by thunderpips
EUR/USD to start this week off!...EUR/USD upside remains active. The pair looks to the end day around its 21 DMA (1.2180) but nonetheless nearer to the top its tighter 1.2146-90 range. Looking ahead, tomorrow’s German ZEW survey will likely gain focus in early hours whilst BoE’s Chief Economist Haldane is ready to make an appearance close to the US cash open. Relatively flat intraday around the 90.00 mark after waning from its 90.30 best towards its 90.03 low on the Dollar Index. Further upside expected on EUR/USD. Use your own trading initiative. Trade safe and have a great week ahead!
Long
by FTUKcom
3
🏛EUR_USD SHORT TRADE UPDATE🔥 🏛In my previous EUR_USD analysis, we saw a conclusive breakout From the rising wedge and a breakout of the horizontal support as well Now, we are seeing a pullback and a retest of the broken level The pair is now trading below a supply area So even if the pair goes higher on the opening I am still bearish and I think that eventually We will see a strong move down With the targets that you can see on the chart! SHORT CONFIRMED🔥 ✅Like and subscribe to never miss a new idea!✅
Short
by ProSignalsFx
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