EUR/USD Prices, Charts and Analysis
• The European Central Bank stepped up its hawkish rhetoric.
• EUR/USD benefited from continued dollar weakness.
ECB President Lagarde(Lagarde)World Economic Forum in Davos(World Economic Forum)It said that the ECB will not pivot and will continue to raise interest rates for long enough,“so we can bring inflation back to2%”. Ms Lagarde also warned those who doubt the ECB’s intentions to tighten monetary policy further into restrictive territory, saying,“I ask them to correct their position, they are wise to do so“.Dutch central bank governor Klaas·Knott(Klass Knot)Also said at the Davos Forum that interest rates will not be raised because of a single rate hike50base point and stop. Knott added,“Most of the areas we had to cover, we hiked multiple times50basis point continuous pace to cover“. Whether the market chooses to listen to the ECB is another matter, and unless the central bank follows through on its words, its authority will come under increasing pressure. Financial markets are a very unforgiving place.
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Next week’s economic calendar has a series of high-importance data releases that will affect the euro/Both sides of the dollar.The second half of the week looks most likely to influence price action, starting with the fourth quarter in the USGDPfollowed by Core Personal Consumption Expenditures, the Fed’s preferred measure of inflation(PCE)if these figures undershoot or beat expectations, then the euro/The volatility of the dollar will rise sharply.In addition to the above data, the latest round ofPMIData will be available next Tuesday(twenty fourday)announcements should be followed closely.
For all market-moving economic news and events, seeDailyFX Economic Calendar.
EUR/USD is currently in a tight consolidation pattern and as the day progresses,1.0770to1.0780Nearby short-term support looks stronger. On top of this,1.07910The nearby former support-turned-resistance is also obvious, and the next resistance level is at1.09370.If the pair is confirmed above this level, then at1.11855There is little technical resistance ahead.recently overboughtCCIA downward adjustment is currently underway, which should help support the pair in the short term.
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EUR/USD daily price chart – 2023year1moon20day
Chart fromTrading View
Retail traders trim long positions
Retail trader data show that,37.65%of retail traders are net long and the ratio of shorts to longs is1.66:1.The number of retail traders’ net long positions has decreased compared with yesterday9.03%an increase from last week26.51%;The number of retail traders’ net short positions increased from yesterday10.46%less than last week7.12%.
We typically take a contrarian view on retail trader sentiment, and the fact that retail traders are net short suggests that the euro/USD prices may continue to rise. The position has increased net short compared with yesterday, but decreased net short compared with last week.The combination of current market sentiment and recent changes makes us/The dollar’s trading tends to be further mixed.
(by Nick Cawley)
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