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EURUSD - The U.S. dollar is exceptionally strongFor the past year, our articles continued to stick to the bearish narrative concerning the stock and cryptocurrency markets, mainly based on the FED pursuing higher interest rates to beat high inflation while strengthening the U.S. dollar. With the upcoming FOMC meeting (and another potential rate hike) between 1st and 2nd November 2022, we expect this trend to continue. Indeed, with the ECB lacking behind the FED with the number of rate hikes, we think this represents a significant obstacle to a stronger euro. Historically, the U.S. dollar is exceptionally strong, and it will likely stay that way for a while with more rate hikes on the table. Therefore, we will pay close attention to the closest meeting of central bankers in the USA and reassess our thoughts after it. Illustration 1.01 The monthly chart of EURUSD displays a 40.54% decline from the all-time high until the recent low. The current value of EURUSD is on par with that in the early 2000s. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Short
by Tradersweekly
17
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw a 75bsp ECB hike in September. Post-meeting sources noted the bank is planning to discuss QT at their October meeting. The President showed more communication tact by not giving any clues on estimates for the terminal rate. On spread fragmentation, the bank didn’t provide any new info or clarity on how the eligibility might impact countries like Italy and Spain. Until the BTP/Bund spread breaches 2.55%, markets will have to wait and see whether TPI can make a difference. The main driver for the EUR is the economic outlook, but there are a few different conflicting drivers. Gas supply from Russia remain closed, but energy reform plans have seen EU gas prices lose ground. The war in Ukraine remains a risk, but recent victories by Ukraine has been a more positive development. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief. Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. Resumption of Nord Stream gas flows or if gas storage can see Europe through winter, would ease some of the pressure. Given the EUR’s DXY weighting, better overall risk sentiment that pressures the USD should be supportive for the EUR. POSSIBLE BEARISH SURPRISES Escalation in Ukraine war that risks NATO involvement. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure. If ECB fails to act on the TPI when we see big jolts higher in the BTP/Bund spread could trigger bearish reactions in the EUR. Announcements that Europe gas storage won’t make it through the winter without resumption of gas flows. Given the EUR’s DXY weighting, continued sour risk sentiment that supports the USD should be negative for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent data pointing to a higher likelihood of a EZ recession. Current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply) outweigh the positives. Recession risks remain high and means incoming data like growth & inflation will be watched closely. For now, the focus for the EUR is on multiple fronts from energy to policy to geopolitics. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing another acceleration in the SEP CPI data, the Fed is under pressure to continue hiking rates and ramping up QT. Markets expect another 75bsp hike in NOV and currently prices the terminal rate at 4.8%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). Another choppy week for the USD finishing 0.5% stronger on the week but keeping a small range. With a quiet week ahead on the data side, the USD is most likely going to get most of it’s momentum from overall risk flows. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced for the Fed and USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a >5.0% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. The calendar is extremely light in the week ahead, which means overall risk sentiment could be the biggest source of momentum (which means keeping a close eye on further equity and bond market sell offs). Keep in mind earnings season gets a bit mor exciting this week and will be important to watch for risk.
by thunderpips
1
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw a 75bsp ECB hike in September. Post-meeting sources noted the bank is planning to discuss QT at their October meeting. The President showed more communication tact by not giving any clues on estimates for the terminal rate. On spread fragmentation, the bank didn’t provide any new info or clarity on how the eligibility might impact countries like Italy and Spain. Until the BTP/ Bund spread breaches 2.55%, markets will have to wait and see whether TPI can make a difference. The main driver for the EUR is the economic outlook, but there are a few different conflicting drivers. Gas supply from Russia remain closed, but energy reform plans have seen EU gas prices lose ground. The war in Ukraine remains a risk, but recent victories by Ukraine has been a more positive development. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief. Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. Resumption of Nord Stream gas flows or if gas storage can see Europe through winter, would ease some of the pressure. Given the EUR’s DXY weighting, better overall risk sentiment that pressures the USD should be supportive for the EUR. POSSIBLE BEARISH SURPRISES Escalation in Ukraine war that risks NATO involvement. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure. If ECB fails to act on the TPI when we see big jolts higher in the BTP/ Bund spread could trigger bearish reactions in the EUR. Announcements that Europe gas storage won’t make it through the winter without resumption of gas flows. Given the EUR’s DXY weighting, continued sour risk sentiment that supports the USD should be negative for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent data pointing to a higher likelihood of a EZ recession. Current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply) outweigh the positives. Recession risks remain high and means incoming data like growth & inflation will be watched closely. For now, the focus for the EUR is on multiple fronts from energy to policy to geopolitics. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing acceleration in August, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). It was a choppy week for the USD, with entertaining ‘Fed Pivot’ narratives trying to make sense of the price action. In the week ahead, all eyes turns to the week’s main event which is Thursday’s September US CPI report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now.
by thunderpips
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw a 75bsp ECB hike in September. Post-meeting sources noted the bank is planning to discuss QT at their October meeting. The President showed more communication tact by not giving any clues on estimates for the terminal rate. On spread fragmentation, the bank didn’t provide any new info or clarity on how the eligibility might impact countries like Italy and Spain. Until the BTP/ Bund spread breaches 2.55%, markets will have to wait and see whether TPI can make a difference. The main driver for the EUR is the economic outlook, but there are a few different conflicting drivers. Gas supply from Russia remain closed, but energy reform plans have seen EU gas prices lose ground. The war in Ukraine remains a risk, but recent victories by Ukraine has been a more positive development. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief. Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. Resumption of Nord Stream gas flows or if gas storage can see Europe through winter, would ease some of the pressure. Given the EUR’s DXY weighting, better overall risk sentiment that pressures the USD should be supportive for the EUR. POSSIBLE BEARISH SURPRISES Escalation in Ukraine war that risks NATO involvement. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure. If ECB fails to act on the TPI when we see big jolts higher in the BTP/ Bund spread could trigger bearish reactions in the EUR. Announcements that Europe gas storage won’t make it through the winter without resumption of gas flows. Given the EUR’s DXY weighting, continued sour risk sentiment that supports the USD should be negative for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent data pointing to a higher likelihood of a EZ recession. Current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply) outweigh the positives. Recession risks remain high and means incoming data like growth & inflation will be watched closely. For now, the focus for the EUR is on multiple fronts from energy to policy to geopolitics. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing acceleration in August, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). It was a choppy week for the USD, with entertaining ‘Fed Pivot’ narratives trying to make sense of the price action. In the week ahead, all eyes turns to the week’s main event which is Thursday’s September US CPI report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now.
by thunderpips
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw a 75bsp ECB hike in September. Post-meeting sources noted the bank is planning to discuss QT at their October meeting. The President showed more communication tact by not giving any clues on estimates for the terminal rate. On spread fragmentation, the bank didn’t provide any new info or clarity on how the eligibility might impact countries like Italy and Spain. Until the BTP/ Bund spread breaches 2.55%, markets will have to wait and see whether TPI can make a difference. The main driver for the EUR is the economic outlook, but there are a few different conflicting drivers. Gas supply from Russia remain closed, but energy reform plans have seen EU gas prices lose ground. The war in Ukraine remains a risk, but recent victories by Ukraine has been a more positive development. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief. Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. Resumption of Nord Stream gas flows or if gas storage can see Europe through winter, would ease some of the pressure. Given the EUR’s DXY weighting, better overall risk sentiment that pressures the USD should be supportive for the EUR. POSSIBLE BEARISH SURPRISES Escalation in Ukraine war that risks NATO involvement. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure. If ECB fails to act on the TPI when we see big jolts higher in the BTP/ Bund spread could trigger bearish reactions in the EUR. Announcements that Europe gas storage won’t make it through the winter without resumption of gas flows. Given the EUR’s DXY weighting, continued sour risk sentiment that supports the USD should be negative for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent data pointing to a higher likelihood of a EZ recession. Current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply) outweigh the positives. Recession risks remain high and means incoming data like growth & inflation will be watched closely. For now, the focus for the EUR is on multiple fronts from energy to policy to geopolitics. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing acceleration in August, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). It was a choppy week for the USD, with entertaining ‘Fed Pivot’ narratives trying to make sense of the price action. In the week ahead, all eyes turns to the week’s main event which is Thursday’s September US CPI report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. In the upcoming week markets will only have eyes for one data point and that will be the US September CPI data released on Thursday. With expectations of a higher Core CPI YY but expectations of a lower Headline CPI YY it seems risky to trade into this event.
by thunderpips
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw a 75bsp ECB hike in September. Post-meeting sources noted the bank is planning to discuss QT at their October meeting. The President showed more communication tact by not giving any clues on estimates for the terminal rate. On spread fragmentation, the bank didn’t provide any new info or clarity on how the eligibility might impact countries like Italy and Spain. Until the BTP/Bund spread breaches 2.55%, markets will have to wait and see whether TPI can make a difference. The main driver for the EUR is the economic outlook, but there are a few different conflicting drivers. Gas supply from Russia remain closed, but energy reform plans have seen EU gas prices lose ground. The war in Ukraine remains a risk, but recent victories by Ukraine has been a more positive development. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief. Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. Resumption of Nord Stream gas flows or if gas storage can see Europe through winter, would ease some of the pressure. Given the EUR’s DXY weighting, better overall risk sentiment that pressures the USD should be supportive for the EUR. POSSIBLE BEARISH SURPRISES Escalation in Ukraine war that risks NATO involvement. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure. If ECB fails to act on the TPI when we see big jolts higher in the BTP/Bund spread could trigger bearish reactions in the EUR. Announcements that Europe gas storage won’t make it through the winter without resumption of gas flows. Given the EUR’s DXY weighting, continued sour risk sentiment that supports the USD should be negative for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent data pointing to a higher likelihood of a EZ recession. Current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply) outweigh the positives. Recession risks remain high and means incoming data like growth & inflation will be watched closely. For now, the focus for the EUR is on multiple fronts from energy to policy to geopolitics. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing acceleration in August, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). It was a choppy week for the USD, with entertaining ‘Fed Pivot’ narratives trying to make sense of the price action. In the week ahead, all eyes turns to the week’s main event which is Thursday’s September US CPI report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. In the upcoming week markets will only have eyes for one data point and that will be the US September CPI data released on Thursday. With expectations of a higher Core CPI YY but expectations of a lower Headline CPI YY it seems risky to trade into this event.
by thunderpips
2
Joe Gun2Head Trade - EURUSD rally coming to an end?Trade Idea: Selling EURUSD Reasoning: EURUSD rally coming to an end? Entry Level: 0.9907 Take Profit Level: 0.9784 Stop Loss: 0.9937 Risk/Reward: 5.19:1 Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Short
by Signal_Centre
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw a 75bsp ECB hike in September. Post-meeting sources noted the bank is planning to discuss QT at their October meeting. The President showed more communication tact by not giving any clues on estimates for the terminal rate. On spread fragmentation, the bank didn’t provide any new info or clarity on how the eligibility might impact countries like Italy and Spain. Until the BTP/ Bund spread breaches 2.55%, markets will have to wait and see whether TPI can make a difference. The main driver for the EUR is the economic outlook, but there are a few different conflicting drivers. Gas supply from Russia remain closed, but energy reform plans have seen EU gas prices lose a lot of ground. The war in Ukraine remains a risk, but recent victories by Ukraine has been a positive development. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief. Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. Resumption of Nord Stream gas flows or if gas storage can see Europe through winter, would ease some of the pressure. Given the EUR’s DXY weighting, better overall risk sentiment that pressures the USD should be supportive for the EUR. POSSIBLE BEARISH SURPRISES Escalation in Ukraine war that risks NATO involvement. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure. If ECB fails to act on the TPI when we see big jolts higher in the BTP/ Bund spread could trigger bearish reactions in the EUR. Announcements that Europe gas storage won’t make it through the winter without resumption of gas flows. Given the EUR’s DXY weighting, continued sour risk sentiment that supports the USD should be negative for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent leading indicators pointing to a higher likelihood of a EZ recession. Current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply) outweigh the positives. But recent price action suggests the energy reforms, progress in Ukraine and the push lower in EZ gas futures has stopped some of the bleeding. Recession risks remain high and means incoming data like growth & inflation will be watched closely. For now, the focus for the EUR is on multiple fronts from energy to policy to geopolitics, which means we don’t want to be hasty with looking for new EUR trades and want a very clear reason to trade the currency in the short-term. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8%, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y . The Aug CPI saw markets price out the likelihood of a soft landing and subsequent price action saw typical bear market behaviour with heightened volatility across major asset classes giving the USD a big bout of safe haven inflows. This past week, the BoE’s attempt to calm down the bond market & threat of Yuan intervention saw some mild pressure in the USD. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming data that exacerbates fears of a deep recession and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. With some lingering expectations of a possible ‘soft landing’ for the US economy, any goldilocks data (higher growth & labour but lower inflation data) could trigger safe haven outflows from the USD and into US equities. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. The upcoming week is full of important data with the two ISM prints and of course NFP. Even though the USD is expected to trade cyclically with incoming data, we do need to keep an open mind about goldilocks data (higher growth and lower inflation ) as that could see a nuanced reaction in the USD.
by thunderpips
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw a 75bsp ECB hike in September. Post-meeting sources noted the bank is planning to discuss QT at their October meeting. The President showed more communication tact by not giving any clues on estimates for the terminal rate. On spread fragmentation, the bank didn’t provide any new info or clarity on how the eligibility might impact countries like Italy and Spain. Until the BTP/Bund spread breaches 2.55%, markets will have to wait and see whether TPI can make a difference. The main driver for the EUR is the economic outlook, but there are a few different conflicting drivers. Gas supply from Russia remain closed, but energy reform plans have seen EU gas prices lose a lot of ground. The war in Ukraine remains a risk, but recent victories by Ukraine has been a positive development. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief. Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. Resumption of Nord Stream gas flows or if gas storage can see Europe through winter, would ease some of the pressure. Given the EUR’s DXY weighting, better overall risk sentiment that pressures the USD should be supportive for the EUR. POSSIBLE BEARISH SURPRISES Escalation in Ukraine war that risks NATO involvement. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure. If ECB fails to act on the TPI when we see big jolts higher in the BTP/Bund spread could trigger bearish reactions in the EUR. Announcements that Europe gas storage won’t make it through the winter without resumption of gas flows. Given the EUR’s DXY weighting, continued sour risk sentiment that supports the USD should be negative for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent leading indicators pointing to a higher likelihood of a EZ recession. Current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply) outweigh the positives. But recent price action suggests the energy reforms, progress in Ukraine and the push lower in EZ gas futures has stopped some of the bleeding. Recession risks remain high and means incoming data like growth & inflation will be watched closely. For now, the focus for the EUR is on multiple fronts from energy to policy to geopolitics, which means we don’t want to be hasty with looking for new EUR trades and want a very clear reason to trade the currency in the short-term. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8%, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y. The Aug CPI saw markets price out the likelihood of a soft landing and subsequent price action saw typical bear market behaviour with heightened volatility across major asset classes giving the USD a big bout of safe haven inflows. This past week, the BoE’s attempt to calm down the bond market & threat of Yuan intervention saw some mild pressure in the USD. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming data that exacerbates fears of a deep recession and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. With some lingering expectations of a possible ‘soft landing’ for the US economy, any goldilocks data (higher growth & labour but lower inflation data) could trigger safe haven outflows from the USD and into US equities. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. The upcoming week is full of important data with the two ISM prints and of course NFP. Even though the USD is expected to trade cyclically with incoming data, we do need to keep an open mind about goldilocks data (higher growth and lower inflation) as that could see a nuanced reaction in the USD.
by thunderpips
2
EURUSD CORRECTION? Looking for LONGS!Hello traders, Today we will be monitoring EURUSD as we have been extremely interested in catching our expected buys which have already begun! EURUSD has been in a bearish impulsive wave since summer 2021 and I believe we have come to the end of our bearish wave which is where we should be seeing a correction form. I am anticipating a ABC correction to form before seeing any more weakness from EURUSD. Why we are looking to buy? - Elliot bearish wave has come to an end and we are now in a correction. - We have rejected our fibonacci level perfectly as anticipated. - We can see the 1HR EMA is being respected on the downtrend, we can use this as a confirmation of bullishness as this will confirm a change in direction. We what are we looking for? - We are looking for a break of the 1HR EMA/WFB trendline or BOTH! Using both will give you the strongest confirmation. Be sure to BOOST🚀 my idea if you like it Thanks MoneymanFX
Long
by Pips-Collector
1
Huge drop on EURUSD.Hi! Even though the geopolitical situation in my opinion looks like this: Europe: The elections in Italy are approaching, the risk of a Eurosceptic right-wing prime minister An unexpected solution to the war in Ukraine seems very unlikely, but it could escalate very quickly, especially taking into account mobilization and referenda. According to my detailed analysis, we can expect bigger drops to around 0.93437. This price is also a determinant of taking a long position to 1.00380 levels.
Long
by xxpqxx999
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw the ECB hike rates 75bsp at their Sep meeting, with post ECB sources saying the bank is planning to discuss Quantitative Tightening at the Oct meeting. It seems like President Lagarde learnt from here July mistakes by being very careful not to give any clues away on where the ECB thinks the terminal or neutral rate is. On spread fragmentation, the bank didn’t provide any new info or clarity on how the eligibility might impact countries like Italy and Spain. Until the BTP/Bund spread breaches 2.55%, markets will have to wait and see whether TPI can make a difference. The main driver for the EUR is the economic outlook, but there are a few different conflicting drivers. Gas supply from Russia remain closed, but energy reform plans have seen EU gas prices lose a lot of ground. The war in Ukraine remains a risk, but recent victories by Ukraine has been a positive development. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief (incoming S&P Global Flash PMIs will be very important) Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. Resumption of Nord Stream gas flows or if gas storage can see Europe through winter, would ease some of the pressure. Given the EUR’s high weighting in the DXY, a dovish FOMC reaction in the USD should be supportive for the EUR. POSSIBLE BEARISH SURPRISES Escalation in Ukraine war that risks NATO involvement. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure (incoming S&P Global Flash PMIs will be very important) If ECB fails to act on the TPI when we see big jolts higher in the BTP/Bund spread could trigger bearish reactions in the EUR. Announcements that Europe gas storage won’t make it through the winter without resumption of gas flows. Given the EUR’s high weighting in the DXY, a hawkish FOMC reaction in the USD should pressure the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent leading indicators pointing to a much faster economic slowdown than markets previously expected. The current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply concerns) outweigh the positives. But recent price action suggests that the energy reforms, progress in Ukraine and the push lower in European gas futures has been enough to stop the bleeding for now. Recession risks remain and means incoming data like this week’s S&P Global Flash PMIs will be watched closely. For now, the focus for the EUR is on multiple fronts from energy to policy to geopolitics. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8%, the Fed is under pressure to continue hiking rates and ramping up QT to try and equalize supply and demand . They hiked rates 75bsp in July, and after the strong Aug CPI , another 75bsp hike is fully priced and question for the FOMC meeting this week is whether they hike 100bsp. Recent Fed communication pushed back against rate cuts in 2023 and stressed that rates could reach close to 4% in early 2023 and stay there throughout 2023. In July, the Fed announced a data-dependent (meeting-by-meeting) policy stance, explaining that the pace of hikes is likely to slow as rates get more restrictive and more data becomes available. This means incoming growth, inflation and jobs data remains key drivers for short-term USD price action where we expect a cyclical reaction to incoming data (good data being good for the USD and US10Y and bad data being bad for the USD and US10Y ). The Aug CPI print saw markets pricing out the likelihood of a soft landing. This saw further downside in bonds and equities and upside in the USD. However, this narrative is still in focus for many market participants. So, if incoming data continues to suggest that a soft landing is possible, we expect that to pressure the USD. But we’ll let the data guide us. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming data that exacerbates fears of a deep recession and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. The Aug CPI saw markets price in a higher terminal rate for the current Fed cycle, which means a lot is already priced going into the FOMC decision. However, should the Fed bring out the big guns and the Dot Plot median for 2023 is closer to 5% or they hike 100bsp, that could trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. With some growing expectations of a possible ‘soft landing’ for the US economy surfacing, further goldilocks data (higher growth & labour but lower inflation ) could trigger safe haven outflows from the USD and into US equities. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side this week with their FOMC decision. If the dot plot does not exceed what is already priced for the curve or the Fed sticks to a 75bsp hike, it could trigger some sell-the-fact reactions to the downside for the USD. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk assets. But the data dependent stance from the Fed means that short-term data surprises can pull the USD either way. The recent string of data has triggered some ‘soft landing’ expectations for the US economy, which is expected to weigh on the USD given all of the safe haven inflows based on recession fears. This makes incoming data even more important. Going into the FOMC, there is already a lot priced for the on the rate side and markets are preparing for a very hawkish message. That does increase the risk of a sell-the-fact reaction.
by thunderpips
12
EURUSD Recovering!!! Euro have a GDP above the forecast. And today the PPI of US was released and the price is following the inflation that was realeased yesterday. Today PPI (mom) show us a -0,4%. The prices are increasing in US and Euro seems to start recovering the usual currency price. We can see the MACD almost crossing 0, and we can see before the price was oversolding, and when the volume started to be higher the price start to have the "correction" We also have a strong support, that was crossed in September 08, but was just a retest and after that went long The yellow line is a 1H resistance, that has been constatly tested The white arrows is our three prediction that could occur, but if the price cross the blue box, the trade must close and it has to be analysed again
Long
by AFCapital21
EUR USD - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Inflation >9% saw the ECB hike rates 75bsp at their September meeting, with post ECB sources saying the bank is planning to discuss Quantitative Tightening at the October meeting. It seems like President Lagarde learnt from here July mistakes by being very careful not to give any clues away on where the ECB thinks the terminal rate is. On spread fragmentation, the bank didn’t provide any new info, and didn’t add any new clarity on how the eligibility might impact how countries like Italy and Spain will be able to take advantage of the tool in the first place. Until the BTP/ Bund spread reaches above 2.55% markets we’ll have to wait and see whether this program can make a difference. Even though policy is important, the main driver for the EUR is the economic outlook. Recent Nord Stream comments opened up a lot of potential downside risks, but for now markets need more details on how it’ll impact energy levels in the winter. Apart from that, focus will also turn to the ongoing Ukraine/Russia war where weekend developments have been more positive. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine would open up a lot of EUR upside. Stagflation risks remains, but with lots of bad news priced any materially better-than-expected data could spark some relief. Any TPI comments that convinces markets it can solve spread fragmentation issues should be supportive for the EUR. If Russia re-opens Nord Stream gas flows, it should be a positive catalyst for the EUR. If gas storage levels, see Europe through winter that could ease some of the pressure so storage levels will be watched. POSSIBLE BEARISH SURPRISES Any escalation in the Ukraine war that risks including NATO would be big negative risks. Stagflation risks remains, even with lots of bad news priced any materially worse-than-expected data could see more pressure. If ECB fails to act on the TPI when we see big jolts higher in the BTP/ Bund spread could trigger bearish reactions in the EUR. If Russia keeps Nord Stream one shut, it should add downside risks to the EUR. If gas storage levels are not enough to see Europe through the winter that should increase energy supply concerns for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent leading indicators pointing to a much faster economic slowdown than markets previously expected. The current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply concerns) far outweigh the positives from a hawkish ECB. Recession risks have opened up a narrative change for the EUR which have seen markets adjust forecasts to reflect higher recession probabilities which has continued to weigh on the EUR. However, with lots of bad news priced in there is risks in chasing the EUR lower from the current levels, which means waiting for more attractive levels to short or waiting for a strong enough catalyst to short would be the preferred strategy for the EUR right now. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8%, the Fed is under pressure to continue hiking rates and ramping up QT this month to try and bring demand and supply back in balance. They hiked rates 75bsp in July, and whether they go 50bsp or 75bsp in September will come down to this week’s CPI . At the Jackson Hole the Fed took a hawkish turn by pushing back against rate cuts in 2023 and stressing they not only envision hiking rates to close to 4% by early 2023 but also expect to keep rates high throughout 2023. However, the Fed did announce a data-dependent (meeting-by-meeting) policy stance in July, explaining that the pace of hikes is likely to slow as rates get more restrictive and as more data becomes available. This means incoming growth, inflation and jobs data will be key drivers for short-term USD price action where we expect a cyclical reaction to incoming data (good data being good for the USD and US10Y and bad data being bad for the USD and US10Y ). Even though a resolute Fed can put further cyclically driven pressure on bonds and equities and support the USD, the most recent economic data has painted a bit of a goldilocks environment where most growth & labour data has surprised higher while inflation data has surprised lower. This has seen some ‘soft landing’ expectations surfacing which we would expect to support equities and bonds and to pressure the USD should the goldilocks pattern with incoming data continue. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming data that exacerbates fears of a deep recession and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. Various data is pointing to downward pressure on CPI , enough for 1-year inflation expectations to trade below the Fed’s 2% target. With the ‘peak inflation’ narrative back in full force, a huge upside surprise in CPI this week could disappoint risk buyers and see further upside pressure on the USD. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. With some growing expectations of a possible ‘soft landing’ for the US economy surfacing, further goldilocks data (higher growth & labour but lower inflation ) could trigger safe haven outflows from the USD and into US equities. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. With the Fed in their blackout period, all eyes will be on the incoming data. If inflation confirms new calls for peak inflation with another miss across the board that could trigger downside for the USD. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk assets. But the data dependence stance from the Fed means that short-term data surprises can pull the USD either way. The recent string of data has triggered some ‘soft landing’ expectations for the US economy, which is expected to weigh on the USD given all of the safe haven inflows based on recession fears. In the short-term, with positioning in mind, and speculation of both ‘peak inflation’ and a ‘soft landing’, we would expect a softer USD in the week ahead running into the CPI print. A beat or a big miss can create equally big reactions in the short-term, but we would prefer shorting opportunities on a surprise CPI miss.
by thunderpips
2