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short EUR/USD Fundamentals:- Although there was some weak data from the US last week as a whole the economy is still on the upside. Non Farm payrole figures came in better than expected whilst unemployment creeped back up t 4% from 3.8%. Average hourly earnings also dropped from 0.3% to 0.2%. Over the long term I don't expect this to hold the USD down for any length of time. While on the Euro side it seems that the ECB are reluctant to move forward with interest rates even though the forcast for inflation has risen slightly for 2018/2019. Technicals:- As you can see from the 4 hour chart the previous support from the 6th - 14th June has now come back into play and is acting as resistance. the overbought signal on the stochastic is also giving sellers some confidence to push the price back down. Keeping the stop loss tight on this one but I would hope for a return to 11500. sell stop 11736 stop loss 11805 take profit 11520
Short
by FreeForexSignals4u
EUR/GBPFundamentals:- After a failed trade on this currency pair today we still believe the downside is imminent. Why? After a subdued super Thursday from the BOE and no change in either rate hike or votes by the MPC. Mark Carney later said in an interview with the BBC that it was likely rates would rise before the end of this year. With the outlook for Europe pushing possible rate hikes back to 2019 I would expect the GBP to gain the edge over the Euro in the coming days. Technicals:- After the rate decision from the BOE the price pulled back to a previous resistance level. You could take this trade at market or wait for it to retest the high on the 4th of may. The stochastic is now overbought and sellers are trying to push the price down from this level.
Short
by FreeForexSignals4u
SHORT EURUSD: MISPRICING ECB & FED POLICY/ FUTURE POLICY/ BREXITThe Gross underpricing of ECB and FOMC Monetary Policy Changes - A fully-priced medium-term equilibrium Lower coming? EURUSD: *Short EURUSD 3m-12m Duration: 1/2lots @1.11 - 1.07TP1; 1.04-5TP2 1.01TP3 1. On Decemeber 2nd the ECB cut their rate by 10bps to 0.05%, paradoxically this actually caused EURUSD to rally higher. Thus this is a mispricing as Reductions in CB interest rates send currencies lower as 1) it reduces the demand for the currency as hot money flows, seeking higher rates, falls and; 2) Increases the Supply of the currency as at lower interest rates, banks borrow more and lend more, which in turn (through the bank/ credit multiplier) increases the EUR money supply. - So reduced demand + increased supply = EUR should have a lower value, so EURUSD should have fallen. Instead EURUSD actually rallied 350pips higher to 1.095 on the day - so this policy action has been underpriced - Though it should be noted that the reason EURUSD didnt fall was because going into the Dec ECB meeting expectations of Draghi were priced at 15-20bps of cuts so since he "failed" the market reacted hawkishly/ buy EUR. 2. On Dec 16th the FOMC increased their rate by 25bps to 0.50%. For the same, but opposite, reasons above this leads to increased USD demand and reduced supply. - so the net impact should be aggressively increased USD strength, however, EURUSD only fell by some 100pips before days after erasing these gains to 1.08 back to 1.10 - so this policy action has been underpriced . 3. On March 10th ECB cut their rate to 0.00% or 5bps and extended their QE programme by several EUR100bn. This once again reduces EUR demand and increases EUR supply (even more so as QE is combined). - So the net impact once again should be for EUR weakness to be priced in and EURUSD to trade much lower. However, once again paradoxically on the day EURUSD actually traded HIGHER? from 1.10 to 1.12 - so this ECB policy action is the third CB action to go UNPRICED in EURUSD 4. On the 24th of June the UK voted to leave the European Union in a shock Brexit vote - now given that it was a shock vote, EUR should have traded aggressively lower as one of its strongest countries voting to leave its economic union 1) weakens the E.Unions GDP/ Employment/ Inflation status as the UK leaves; 2) Causes uncertainty regarding the new trade agreements between the UK and itself, especially given that the UK is one of the regions biggest export markets; 3) causes uncertainty regarding other nations leaving - a run on the EU could develop.. currently several more nations have called for a vote. - So all in all the Brexit result is negative for the economic stability of the Euro area and as a result this should reduce demand for EUR as investors fear the worst/ choose safer currencies. Reduced EUR demand should cause EURUSD to trade lower - it took a 200pip loss to 1.118 - 200pips of downside is not enough to price perhaps the most uncertain event possible for the EUR (800pips more suitable given UK is 16% of the eurozone).
Short
by QuantumLogicTrading
2
SHORT EURUSD: DOVISH ECB MONETARY POLICY MINUTES - FRESH EASING?IMO the ECB minutes were the most dovish/ clearly directed statements out of the ECB for several months. Before this, and in the past several speakers comments, sentiment has been towards the hawkish/ stale side, citing "ECB has done enough" as the main rhetoric. The June Minutes however show a renewed positioning of the ECB, where they clearly imply they are willing to take further action if needed be with quotes such as "ECB Ready to Act, Using All Its Policy Tools if Needed", and unlike BOJ Kuroda, the ECB clearly seem to have taken ownership of their poor economic ownership finally by saying " Underlying Inflation Has Yet To Show Clear Signs of Upward Trend" and "To Monitor Inflation Outlook Closely" - given that inflation is their headline goal, such comments, when combined with the above readiness to "act", makes the idea of further easing a much higher probability, especially of late where key members almost have refused to mention further action. IMO, this shift in rhetoric to the dovish/ directive side is in an aim to try and put some negative pressure on the EUR since it has managed to par losses vs the USD, whilst bleeding 12% appreciation vs the GBP. The ECB are likely trying to talk down the currency with such rhetoric, especially in light of brexit, where their currency has failed to revalue/ adjust for the negative economic impact that is coming. I see a very bearish outlook for the EUR over the coming weeks/ months given this new dovish ECB stance, much like the GBP, when a central bank wants the currency lower, that is usually the path it follows. Potential dampeners however are the fact that Draghi has before failed to deliver market expectations (Dec 2015 most notable), so unlike the GBP, the acertive nature of these dovish monutes likely have a diminished impact relatively to say the GBP. Nonetheless, i expect the ECB to continue with the rhetoric and given the appreciation/ stability with their biggest trading partners (USD/ GBP) i expect the ECB to take further action in the near term as as it stands, the EUR exchange rate mechanism will/ is failing to transmit the inflationairy pressure they need (infact the opposite) and further easing is the only way to solve this. Thus, I am short EUR from here, especially against the USD where i think it could be up to 500pips overvalued as it is, given its inability to price previous ECB stimulus (March) and Fed Hike in Dec - this short view is especially the case on the back of likely more easing + brexit uncertainties trade seemingly underpriced (vs EJ) and the new EU export inefficiency to the UK one of its biggest markets (given 12% appreciation) - Clear 4-8wk targets are the 1.082 handle in the near term, with 1.052 lows from dec last year the next aim on the back of any fresh easing/ brexit uncertainties still need to be priced. ECB Monetary Policy Minutes -ECB Minutes: ECB Ready to Act, Using All Its Policy Tools if Needed -ECB Minutes: Brexit Vote Seen As 'Important Source of Uncertainty' for Euro Area Outlook -ECB Minutes: To Monitor Inflation Outlook Closely -ECB Minutes: Brexit Could Cause Significant Negative Economic Spillovers to Euro Area -ECB Minutes: Brexit Impact Could Be Transmitted to Euro Area Through Trade, Financial Markets -ECB Minutes: Underlying Inflation Has Yet To Show Clear Signs of Upward Trend -ECB Minutes: Investors Expect Future Challenges for ECB in Sourcing Enough Bonds Under QE Program -ECB Minutes: It Shouldn't Matter Much Which Precise Assets Are Purchased Under QE -ECB Minutes: What Matters is Overall Purchase Volume, Associated Money Creation -ECB Minutes: Composition of Bond Purchases Still Matters to Investors -ECB Minutes: Health of Euro Area Banks is Key for Effective Transmission of ECB Policy
Short
by QuantumLogicTrading
1
EURGBP SHORTFundamentally the euro is one of the weakest currencies out there and the recent rally is another excuse to go short. The GBP has got some potential as the next rate decision is likely to be an increase according to the BoE. tECHNICALLY WE CAN SEE THE PINBAR REJECTION OF THE 7800 LEVEL WHICH WAS OUR BUYING TARGET FROM A FEW WEEKS BACK AND A POTENTIAL REVERSAL PRICE. I will be placing a stop loss above the pinbar and looking to trade down to 7500 which is a unmissable risk reward potential. want to learn more about how I trade bankonadam.com
Short
by FreeForexSignals4u
short EURUSDThe success of this trade is really going to depend on the outcome of the ECB press conference later today. If the ECB is dovish then the Euro will fall to previous lows of this year. However if they come out with hawkish tones in their language then we could rally back to 11050 and 13000. The fundamental direction for the Euro is bearish so I expect it to return to sell s even if it does rally. I will be taking the risk today and selling from under 10900 before the meeting with a stop above this months high. bankonadam.com learn to trade like a pro
Short
by FreeForexSignals4u