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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
EUR/USD -15/07/2022-• Pair remains under bearish pressure • After a successful break of the previous support level at 1.0340, parity level was reached • Levels sub parity exposed as fundamentals still point to the downside • A clear break of parity level exposes 0.96 figure • The latter served as a support back in 2022 where the pair bottomed before starting a massive rally • Will the 2002 scenario repeat itself in 2022 ? • If that is the case, the next range would be 0.96-1.03 • Bulls need to bring the pair back above the 1.0340 level to turn the odds in their favor • FED-ECB policy divergence is still in play as markets are now pricing in a 100 bps move at the next FOMC meeting.
by RamziAbouAbdallah-CMT
EURUSD - CHOPPY!EURUSD CPI print came out higher, we had bearish movement of EUR but we covered that before end of the day and now re-testing those support lows again break of these area then yes we have further bearish movement and I expect the next support areas to come swiftly in control BUT if we stay above these support areas and re-test out of those highs I expect short term bullish movement. Keep in mind the fundamentals: FEDs soon to go on black out and we have ECB next week. Now ECB they always behind, lag very much they do but could they do 1 hike rate? I mean sure recession is on the table can't really rule that out globally so overall we could be choppy until clear direction of ECB but overall DXY looks over done and when you keep an eye on 10's etc on yields it's inverting overall and that's where you've seen recession trade idea which was on my week ahead out look that can be seen via my trading view account links on YT - I stated very clearly CRUDE WTI its a recession trade, goes down less demand etc. Patience is key! TJ
by Trade_Journal
Euro above parity by a threadIt is looking like July 2022 could be a memorable month for the euro, but unfortunately not for the right reasons. EUR/USD is within a whisker of dropping below parity with the US dollar for the first time since 2002 and the risk of a break below parity below in the coming days remains high. In the North American session, EUR/USD is trading at 1.008, down 1.00%.  The euro, along with all the other majors, is seeing red against the US dollar today. The markets have reacted to the surprisingly strong non-farm payroll report on Friday, as the June gain of 381 thousand surpassed the May reading of 336 thousand and easily beat the consensus of 240 thousand. The unemployment rate remained steady at 3.6%, while wage growth grew by 0.3%. The solid employment report has raised expectations of another 75bp hike by the Fed at the end of July. A 75bp move will substantially widen the Europe/US rate differential, which is contributing to the euro's sharp descent today. The ECB holds its policy meeting six days ahead of the Federal Reserve, on July 21st. This meeting will likely mark the lift-off for ECB rate hikes, with another increase expected in September. The ECB has been scrambling to catch up to the inflation curve, as it badly misjudged the staying power of high inflation. ECB interest rates are in negative territory, and a modest 0.25% hike, the most likely scenario at the July meeting, may not do much to boost the euro, although perhaps the perception that the ECB is finally tightening will provide some support to the ailing currency. On Tuesday, Germany releases ZEW Economic Sentiment. The index has been mired in negative territory for months, indicative of strong pessimism about the economic outlook. In June, the index came in at -28.0 and this is expected to worsen to -40.0 in July. EUR/USD is putting strong pressure on support at 1.001, just above parity. Below, there is support at 0.9849 There is resistance at 1.0124 and 1.0221
by OANDA
EUR/USD Approaching Multiyear Technical & ECB Intervention LevelStocks are doing quite well despite a recession risk which is in focus lately as CB is hiking rates despite the economic downturn in the last few months. But it seems that word “recession” is not in FED’s vocabulary now, and this may not be change so soon after today's NFP numbers came out above expectations, so FED will stick with hawkish policy. ECB is also trying to follow the FED and fight the inflation, which is a “must” as EURUSD moves towards parity and is currently trading at a 20-year low. We must keep in mind that a weak currency in the eurozone is making inflation even worse when you are a net importer. So I think that inflation can come down faster if the currency would be stronger. From an Elliott wave perspective we see pair trading in a higher degree complex correction down from 2008 high, now possibly in late stages with price approaching 78.6% Fib. level that comes in around parity. Technically I assume that Eur can be much higher in years ahead, but the question is what will be the catalyst; Higher EUR interest rates? Ukraine-Russia solution? Downturn of the USD? Maybe foreign exchange interventions? None of us can answer this question at the moment but technically I think that 1:1 Eur vs Usd is clearly an interesting level. However, I think if EURUSD pair moves below parity the ECB intervention may happen. The last time they acted alone was back in 2000 when EURUSD was trading around 0.9000. So firstly, they will try to bring down inflation with higher rates, but then I think intervention is also an option, especially if pair would approach that same 0.9000 level. Trade well, Grega
by ew-forecast
2
Euro slide continuesThe month of July has been an unmitigated disaster for the euro - with only three trading sessions in the books, EUR/USD has declined a staggering 2.73%. Earlier in the day, the euro dropped to 1.0186, its lowest level since December 2002. The euro appears headed for parity with the US dollar, a psychologically significant level. The economic outlook in the eurozone is not an encouraging one. Inflation surged to 8.1% in May, surpassing the April record of 7.4%. A peak in inflation remains elusive, and the ECB is way behind the inflation curve - the central bank hasn't raised interest rates yet, which are in negative territory. Even so, a lukewarm eurozone economy means that raising rates poses the risk of a recession. The energy situation has been deteriorating, as sanctions against Russia have led to counter moves in which Moscow has reduced its gas exports to Europe, which could result in an energy shortage this winter. If Russia reduces oil or gas exports to Europe, prices will soar and this could cause a severe economic downturn. A strike by Norwegian oil and gas workers on Tuesday threatened to exacerbate the situation. The Norwegian government has stepped in and ended the strike, but investors remain nervous as the eurozone's energy situation could become precarious. Today's data out of the eurozone showed some improvement but did little to raise risk sentiment. Germany's Factory Orders rose 0.1% in May, up from -1.6% in April but still a negligible gain. It was a similar story for eurozone retail sales, which came in at 0.2% in May after a -1.4% read in April. On Thursday, Germany releases Industrial Production for May, which is expected to slow to 0.7%, down from 0.4%. EUR/USD faces resistance at 1.0124. Below, there is support at 1.0075 There is resistance at 1.0221 and 1.0324
by OANDA
EUR/USD -29/06/2022-• Trend is still bearish despite latest rally • The pair broke below the rising wedge; a bearish pattern, drawn on the chart yesterday and closed below it, reinforcing the bearish picture • Also, descending trend line since Feb 2022 still acts as resistance, today near 1.06 • Horizontal resistance highlighted in gray color (around 1.08) is a major resistance to be watched • As long as the pair is trading below those resistance levels, it is highly likely that we will see lower prices in the coming days/weeks • Bears had a successful engulfing bearish candle today and are targeting YTD lows at 1.03 followed by 1.02 and parity • Recession fears, Russia-Ukraine war, FED-ECB policy gap supports the bearish picture
Short
by RamziAbouAbdallah-CMT
Out of resistance comes strengthSince we last covered Euro Dollar in our Timing is everything! piece, the pair has traded lower, playing out exactly to our assessment and hitting both of our price targets. However, things have changed quite a bit ever since. Inflation has skyrocketed in the EU and the ECB seems ready to start playing catch-up on rate hikes. Looking at the charts, the Euro Dollar pair has been trading in a triangle pattern with prices bouncing off the support multiple times but failing to breakthrough. The 1.0400 level seems to mark the longer-term resistance, which has been tested multiple times but held strong. We see these as confirmation of a strong resistance. With prices close to the resistance now, we favor the long side in the short term and expect the pair to make its way to the top of the triangle. Entry at 1.04880, stops at 1.03575. Target at 1.0630. Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
CME:6E1!Long
by inspirante
Euro slides as inflation jumpsThe euro is sharply lower on Friday and is currently trading just above the 1.04 line, down 0.76%. Eurozone CPI for June was higher than expected, at 8.6% YoY. The estimate stood at 8.4% and inflation rose sharply from the May reading of 8.1%. This marked a record-high. There was better news from the core reading, which dropped marginally to 3.7% YoY, down from 3.8% in May. Investors have given the inflation data a thumbs-down today and sent the euro tumbling ahead of the weekend. With inflation continuing to accelerate and the ECB revising downwards its growth forecast, the spectre of stagflation in the bloc remains very real. The ECB is no doubt dismayed that inflation was higher than expected, but it's unclear if the record-high CPI release will be enough to deliver a supersize 0.50% hike for its lift-off next month. At this week's ECB forum, ECB head Lagarde talked tough and downplayed concerns over a recession, but there are plenty of dark clouds hovering above the eurozone economy. High inflation, weak growth and the energy crisis with Russia mean that there is certainly good reason to be concerned about a significant downturn in the eurozone economy. In the US, there are worrying signs that the economy is weakening. US Personal Spending fell to 0.3%, down from 0.6% (0.4% exp.). Inflation appears to be declining slowly and the labour market is in solid shape. CME's FedWatch is putting the likelihood of a supersize 0.75% rate increase at 75%, as markets expect the Fed to remain aggressive against inflation. Can a recession be avoided? Fed Chair Powell is saying all the right things in downplaying concerns about the "R" word, but many market participants have their doubts and feel that the US economy will not be able to avoid a recession. .
by OANDA
EUR/USD Pushes Higher As ECB Forum Gets Underway The EUR/USD pair pushed higher on Monday and closed with gains for the second session in a row as the greenback weakened across the board. The pair reached a daily high of 1.0614 but failed to consolidate above 1.0600 and pulled back during the New York session. At the time of writing, the EUR/USD is trading around 1.0580, up 0.25% on the day. The euro moved higher, underpinned by the rise in German yields, while the greenback exhibited weakness across the board despite the advance in US yields. Wall Street indexes had a positive start but then turned south and closed in the red. Market participants continue to assess the impact of monetary policy on employment and growth as major central banks have embarked on contracting cycles. Meanwhile, the European Central Bank Forum on Central Banking got underway in Portugal, with the main focus on Wednesday’s policy panel that will feature ECB, BoE and Fed leaders. From a technical perspective, the EUR/USD holds a slightly positive short-term bias according to the daily chart, although the inability to establish itself above 1.0600 is a sign of momentum lacking. If the euro manages to break above the psychological level, it would face key resistance at a descending trendline coming from February’s highs, currently around 1.0650. A rise past this trendline would improve the pair’s short-term outlook. On the other hand, the immediate support level is seen at daily lows in the 1.0550 area, followed by the 1.0500 mark and then the 1.0470 zone.
by Alex_Boltyan_FXAnalyst