Latest Euro – US Dollar Weakness Helps Stabilize Euro/US Dollar -by Ecork

EUR/USD Price, Chart and Analysis

  • EUR/USD is back above 105.00 on the back of weak US dollar.
  • Speakers at the Federal Reserve, including Jerome Powell, are out of force this week.

The US dollar is on the decline in European trade, back above 105.00 in weak US trade due to the holiday. US Juneteenth, a federal holiday, sees the US bond markets closed, the New York Stock Exchange, and the Nasdaq all closed in celebration of the celebration. The US Dollar Basket (DXY) is currently trading around 0.30, down at 104.14 and in the middle of last Thursday’s dominant 2-point candle (post-FOMC).

US Dollar Basket (DXY) – 20 June 2022

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Over the next few days, there will be significant commentary from a group of Fed members including two days of testimony from Fed Chair Jerome Powell on Wednesday and Thursday. Markets will be looking for more clues from the Fed chair after the central bank raised interest rates by 0.75% last week and signaled a further 75 basis point hike could be on the way at the FOMC meeting in July. While the Fed has arguably been behind the curve compared to pricing a money market raise, Powell’s comments should be followed closely.

The daily chart of the EUR/USD continues to paint a mixed picture with a series of long-term lower highs now converging with a short-term series of higher lows. The pair is still below the three simple moving averages, which is a negative formation, while the CCI indicator has moved outside the oversold territory. Looking at the short-term levels, last Thursday’s candle between 103.80 and 106.00 should provide initial support and resistance targets.

Learn about different types of moving averages

EUR/USD daily price chart – June 20, 2022

Latest Euro - US Dollar Weakness Helps Stabilize Euro/US Dollar

Retailer data show 68.92% of traders are net long with the ratio of long to short traders at 2.22 to 1. The number of long traders is up 3.98% from yesterday and down by 1.07% from last week, while the number of short traders is up by 6.18% from yesterday and down by 5.91% from last week.

We usually take a conflicting view with crowd sentiment, and the fact that traders are holding suggests that EUR/USD prices may continue lower. Positioning is net less than yesterday but more net than last week. The combination of current feelings and recent changes gives us more Mixed EUR/USD trading bias.

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