EUR Talking Points
- EURUSD Pushing Higher
- Eurozone Confidence Data
The EURUSD continues to push higher past 1.1150 after seeing new 2019 lows of 1.1110 last Friday following better than expected US GDP figures. The uptrend, which started on the back of the Spanish Election outcome, was continuing this morning as the lack of material figures from the Eurozone saw the EUR’s sensitivity to Consumer Confidence figures reinforced. On release of the figures, the pair moved slightly lower but quickly bounced back surpassing the 1.1164 line.
EURUSD PRICE CHART: 1 Minute Time-Frame (Intraday)
As the session ahead has little in terms of key economic releases from the Eurozone, the main driver on the currency pair is expected this afternoon when the US Price and Spending figures are released.
EURUSD traders will now look ahead to the provisional Eurozone Q1 GDP figures out Tuesday which are expected to show a slight increase from 0.2% to 0.3%, despite the Brexit drag. At the end of the week, the first look at Eurozone inflation data will be closely watched. Inflation in the single-block is expected to tick up to 1.6% from 1.4% y/y.
Eurozone Confidence Data
The final figures for Consumer Confidence in the month of April remain constant at -7.9 as the Eurozone Economic Confidence hits its lowest level since September 2016 at 104.
Despite an increase from 11.3 to 11.5 in the Eurozone Services Confidence, which accounts for roughly two thirds of total Euro-zone GDP, it has not proved to be enough to halt the decline in Economic Confidence. The fall is mainly led by a deterioration of Industrial Confidence from -1.7 to -2, which accounts for 40% of the Index. This figure asks for production expectations, meaning that a deterioration indicates a negative outlook for the future of the business spending and capital investment. Sentiment in the industry fell for a fifth consecutive month to -4.1 from -1.6 in March, well below expectations of -2.
IG Client Sentiment – EURUSD: Retail trader data shows 56.0% of traders are net-long with the ratio of traders long to short at 1.27 to 1. In fact, traders have remained net-long since Apr 12 when EURUSD traded near 1.12974; price has moved 0.4% lower since then. The number of traders net-long is 3.0% lower than yesterday and 6.7% higher from last week, while the number of traders net-short is 16.6% higher than yesterday and 5.8% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EURUSD prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
EURUSD Weekly Technical Outlook: Euro May Bounce, but Buyer Beware – Paul Robinson, Currency Strategist
Eurozone Debt Crisis: How to Trade Future Disasters – Martin Essex, MSTA, Analyst and Editor
KEY TRADING RESOURCES:
— Written by Daniela Sabin Hathorn, Junior Analyst