EUR / USD Rate Talking Points
EUR / USD unable to defend the 2021 range as it takes the lowest level in March (1.1704) and the exchange rate may continue to trade with fresh annual lows The Kansas City Fed Economic Symposium is scheduled for Aug. 26 – 28 as it prolongs the series of lower ups and downs from the beginning of the week.
EUR / USD outlook not due to low protection in March
EUR/USD gives back a bullish reaction Protocol of the Federal Open Market Committee (FOMC) on the back US dollar strength and speculation about a threatening change in Fed policy could keep the exchange rate under pressure, as the European Central Bank (ECB) appears to be on the path.
In a recent blog post on the ECB’s website about the Chief Economist Philip Lane stresses that “a the commitment to maintain a sustainable monetary adjustment is important in view of the actual floor and the deficit gap in the medium-term inflation outlook compared to the 2% target;, “Where the official largely defends the amazing guidance of monetary policy in the current form of the Council”ready to adjust all its instruments to ensure that inflation stabilizes over the medium term in line with our 2% target.“
Comments suggest that the ECB will remain on the same pattern when deciding on its next interest rate on 9 September, as the central bank prepares for a temporary rise in inflation and monetary policy deviations may keep the EUR / USD under increasing pressure. Federal Reserve officials show greater willingness to shift gears.
In turn, not protecting the 2021 range could lead to an annual low of EUR / USD amid growing contributions to the imminent change in Fed policy, but a further depreciation of the exchange rate could encourage retail sentiment, such as behavior. seen earlier this year.
The IG customer feelings report shows 62.33% of traders are now net length EUR / USD, traders with a long and short relationship standing 1.65 to 1.
The number of traders in net length is 12.15% lower than yesterday and 19.24% lower than last week, while the number of short traders is 3.52% higher than yesterday and 2.78% higher than last week. The decline in the net short position is due to the fact that EUR / USD has helped to alleviate crowding-out behavior, as 67.80% of traders had net lengths of EUR / USD last week, while the rise in the short net position is due to exchange rate trading. fresh low per year (1.1666).
That being said, a break March Low (1,1704) enters a harsh outlook for the euro / dollar ahead of this month’s later Federal Symposium, and the exchange rate may continue to trade at fresh lower annual levels as it prolongs the series of lower ups and downs from the beginning of the week.
EUR / USD exchange rate daily schedule
Source: Trading View
- EUR / USD trades in SMAs below 200 days (1.2004) for the first time since April, as the lowest level in March (1.1704) failed the highest test in January (1.2350), exchange rate trading reached a new low in August (1.1666) in August, as the 50-day SMA (1.1846) now reflects a negative slope.
- However, the Relative Strength Index (RSI) appears to be deviating from the price as the oscillator breaks out of the downward trend at the beginning of this year, remaining above oversold territory even if the EUR / USD fails to protect the 2021 range.
- Close below 1.1700 (23.6% expansion) to 1.1710 (retracement) the area brings a Fibonacci overlap on the radar of approximately 1.1640 (50% expansion) to 1.1670 (50% retracement), the next area of interest is approximately 1.1580 (61.8% expansion).
– Written by David Song, currency strategist
Follow me on Twitter at @DavidJSong