EUR/USD trying to extend its recovery
Beyond safe-havens on the run, the FX market is offering little this Friday. The EUR/USD trades in the 1.1730/40 region pretty much since the day started and seems unlikely it would move far away from the level today due to a scarce macroeconomic calendar and both currencies weakened by self woes.
1. Technical Overview
The pair is poised to close the week in the red after advancing for five consecutive ones, a sign of a probable top underway. Nevertheless, the dollar is far from market's favor after the latest political jitters in the US, and Fed's dovish minutes for its latest meeting.
Below 1.1690, on the other hand, the pair can extend its decline< to fresh weekly lows around 1.1650, while further declines beyond this last could see the pair nearing 1.1600 by the end of the week.
EUR/USD PIVOT POINTS
EUR/USD TRADING POSITIONS
EUR/USD PRICE SENTIMENT
EUR/USD BULLISH PERCENTAGE INDEX
2. Fundamental Overview
After strengthening at the beginning of the day, the US dollar edged lower against all of its G10
counterparts amid the Trump-related tensions and the softer-than-expected industrial production in July (+0.2% month-on-month vs. +0.3% expected and 0.4% printed a month earlier). The US stocks were offered in New York.
The EUR was hit by the European Central Bank (ECB) meeting accounts revealed concerns about the euro appreciation, given that a stronger currency could jeopardise the ECB’s efforts to pull the inflation up to the 2% policy target. As expected, the ECB minutes gave no details regarding the Quantitative Easing (QE) exit plans on Thursday. President Mario Draghi is not expected to talk about the QE exit plans at next week’s Jackson Hole meeting either. He will likely keep the market in suspense until the ECB’s September policy meeting, which corresponds to the end of the current QE program. Traders are expected to remain buyer at dips on speculations of an eventual QE tapering. Decent call options stand at 1.1650 - 1.1800 at today’s expiry and should give support to the bulls before the weekly closing bell. Meanwhile, the probability of a significant QE taper is fading due to rising concerns on the Eurozone inflation. Rising doubts among the ECB-hawks could limit the euro's upside potential.
LThe political fallout for Donald Trump following his reaction to Charlottesville is suddenly spilling into the markets, with the dollar under pressure and equities selling off. Rumours of that key members of his administration were upset over his response this week and could be close to resignation have further dented any expectation that Trump could achieve anything in Congress.
EURUSD FUNDAMENTALS TODAY
3. Latest News & Analysis
4. EUR/USD Big Picture
Themes affecting the EUR/USD
Influential Institutions & People for the EUR/USD
The Euro US Dollar can be seriously affected by news or the decisions taken by two main central banks:
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone and maintain price stability, so that the euro’s purchasing power is not eroded by inflation. The ECB aims to ensure that the year-on-year increase in consumer prices is less than, but close to 2% over the medium term. Another of its tasks is the one of controlling the money supply. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Mario Draghi, member of the Executive Board, is also the President of this organism.
On the other
Mario Draghi is member of ECB's Executive Board and also the President of this organism. His declarations are an important source of volatility, especially for the Euro and the currencies traded against it. Born in 1947 in Rome, Italy, he graduated of the Massachusetts Institute of Technology and became President of the European Central Bank in 2011. Draghi gives press conferences in the back of how the ECB observes the current European economy. His comments may determine positive or negative trends for the Euro in the short-term. Usually, a hawkish outlook is seen as positive/bullish for the EUR, while a dovish one is seen as negative/bearish.
Janet L. Yellen (born August 13, 1946) took office as Chair of the Board of Governors of the Federal Reserve System (Fed) on February 3, 2014, for a four-year term ending February 3, 2018. She had already previously served as a Vice Chair from 2010 to 2014. This American economist also serves as Chairman of the Federal Open Market Committee (FOMC), the System's principal monetary policymaking body. Her declarations are also an important source of volatility, especially for the US Dollar and the currencies traded against it.
ECB NEWS & ANALYSIS
FED NEWS & ANALYSIS
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, it is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online. If there is important U.S. data we can expect quiet markets just ahead of the number. U.S. economic news have the ability to either reinforce an existing trend or reverse it depending on by how much it missed or beat expectations with the EUR/USD news. By 5:00 GMT liquidity leaves the market once again as European traders close out positions and head home.
EURUSD 2017 YEARLY FORECAST
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', reffering to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from United States of America). The Cable is a widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, where the majority of the British voted to abandon the European Union, GBP/USD has been suffering some turbulence in the Forex market as a consequence of the associated risks of leaving the single market.
The USD/JPY (or US Dollar Japanese Yen) currency pair is one of the 'Majors', the most important pairs in the world. Japanese Yen has a low interest rate, normally used in carry trades, that's why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when reffered to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is dued to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.