Euro (EUR / USD) price, chart and analysis
- EUR / USD the trend of lower continues.
- The European Central Bank removes the ambiguity about their inflation target.
ECB President Christine Lagarde said the recent ECB strategy review would reduce uncertainty about the central bank’s inflation target by replacing the old “below but close to 2 per cent” with a “simple, firm, symmetrical two per cent target”. In an interview with The Financial Times, President Lagarde said posted on the ECB’s website,
“the new strategy gives us the flexibility to be around two percent, because we understand that two percent is not a ceiling, and we recognize that oscillations are about two percent. It is more flexible because we recognize the impact of the real lower limit and the constraints it places on us. And we define very clearly the particularly strong or sustained response and strong response that we are prepared to give. We also agree that this may mean temporary moderate deviations above the target. So in that sense, it’s more flexible. “
The latest review suggests that the central bank is stronger in tackling inflation if it is below 2%, while short-term excesses above 2% are accepted, meaning that any tightening of monetary policy is undermined.
On the other side of the pair, the upcoming US inflation data may prove a catalyst for KAT US dollar to continue its recent rally. Today’s statement is expected to show yoy (food and energy inflation) at 4% – the highest level in almost three decades – compared to 3.8% in May. Any missed today or a weaker retail edition than expected on Friday could give the couple some respite in a short amount of time before the decline continues.
US basic consumer prices
For all economic data and events in the market, see DailyFX calendar.
EUR/USD is currently trading at just under 1.1850 and may appear to be able to run last Wednesday at a lower level of 1.1780. A break below would leave a vulnerable low of 1.1704 at the end of March before the 38.2% Fibonacci retracement level at 1.1695 comes into play. The short-term rise is currently limited to around 1.1880 / 85.
EUR / USD daily price chart (June 2020 – July 13, 2021)
Retailer details show 53.07% of traders are net long and the ratio of long to short traders is 1.13: 1.The number of net long traders is 10.56% higher than yesterday and 9.95% lower than last week, while the number of net short traders is 0.05% higher than yesterday and 7.11% higher than last week.
We usually view the contradictory situation of the crowd, and the fact that traders are net long indicates a continuing decline in EUR / USD prices.Positioning is longer than yesterday, but less than last week. The combination of the current mood and recent changes gives us even more mixed EUR / USD trading bias.
What is your view EUR / USD – bullish or bearish ?? You can let us know via the form at the end of this section, or you can contact the author via Twitter @ nickcawley1.