EURUSD: Investors add bearish bets despite weak US data, tighter German-US yield spreads

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EUR/USD: Investors add bearish bets despite weak US data, tighter German-US yield spreads

  • EUR/USD risk reversals fell to near three-month lows yesterday, signaling a rise in demand for bearish bets (put options).
  • Investors added bearish bets even though the US retail sales painted a dismal picture of the world's largest economy and the US-German bond yield spreads tightened.
  • EUR/USD, therefore, is unlikely to see significant gains. Technically speaking, the bias remains bearish while the pair is held below the 200-week moving average (MA).

Risk reversals on the EUR, a gauge of puts to calls, fell to their lowest level since November on Thursday, indicating investors are adding bets to position for further weakness in the common currency.

One-month 25 delta risk reversals (EUR1MRR) dropped to -0.70, a level last seen in Nov. 29, from the previous day's value of -0.675. A negative number indicates the demand (value) for put options (bearish bets) is higher than that for calls. So, the drop from -0.675 to -0.70 means the demand for put options rose yesterday despite weak US data.

The US Commerce Department reported a 1.2 percent drop in retail sales in January (the largest since Q3 2009), reinforcing dovish Fed expectations. The spread between the 2-year US and German bond yields narrowed to 305 basis points from 310 basis points in the EUR-positive manner. Meanwhile, 10-year yield spread also narrowed to 255 basis points from 258 basis points.

Even so, risk reversals dropped in favor of puts. Put simply, market sentiment is bearish on EUR/USD and hence, a bounce, if any, could be short-lived. Validating that argument is the last week's bearish close below the 200-week MA. That average is currently located at 1.1329 and the bias will remain bearish as long as the spot is held below that key level.


Source: https://www.fxstreet.com/news/eur-usd-i ... 1902150430
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EURUSD Weekly Technical Forecast: Euro Flirting with Support Break

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EURUSD Weekly Technical Forecast: Euro Flirting with Support Break

  • Euro seeing limited sponsorship around important support
  • Change in character from before may be sign of momentum to come

EURO SEEING LIMITED SPONSORSHIP AROUND IMPORTANT SUPPORT
Heading into last Monday, given the way the Euro has traded in recent months in this low volatility environment, the expectation was for a bounce from support instead of slicing on through. The bounce on Tuesday started to look like other prior lows in recent months, but the final days of the week began to demonstrate a change in character

The fact that EURUSD is struggling to bounce after selling off and hitting support suggests that sellers are growing in number and that a breakdown of meaning could be just around the bend. As long as price on a closing basis stays below the weekly high at 11341, a neutral bias at the least will be intact.

A drop below 11215, the November low, will leave behind the support we saw hold last week and have the worst levels since June 2017 in play. As discussed on numerous occasions in recent weeks, Euro volatility is very low and due for a pop. A break of key support levels may do the trick in the days ahead.

If the November low breaks, next up is support by way of 11119 and the underside trend-line from November 2017. This could certainly quash any excitement of real momentum coming in, but if that can’t hold along then there isn’t much in the way of visible support for a good way lower.

All-in-all, price action is showing signs of changing from the recent norm, which should have traders on higher-than-normal alert for momentum to develop. It could be another false signal, but then again it might not, and as the saying goes, ‘chance favors the prepared mind.’

Traders are long EURUSD by a good amount, see the IG Client Sentiment page to find out how changes in positioning can act as a signal for price direction.

EURUSD DAILY CHART (BREAKDOWN COULD BE VERY NEAR)
Source: https://www.dailyfx.com/forex/technical ... Break.html
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EURUSD Technical Analysis: Spot remains supported by 2018 low at 1.1215

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EUR/USD Technical Analysis: Spot remains supported by 2018 low at 1.1215

  • EUR/USD managed to regain some buying interest after dropping to fresh 2019 lows at 1.1248 last Friday.
  • Extra pullbacks should face 2018 lows at 1.1216. As long as this level underpins, further rangebound and potential bullish attempts should not be ruled out.
  • Initial target is now at last week’s tops in the 1.1340 region. This resistance zone is reinforced by the Fibo retracement of the September-November drop at 1.1356.


Overview:
Today Last Price: 1.131
Today Daily change: 36 pips
Today Daily change %: 0.11%
Today Daily Open: 1.1298

Trends:
Daily SMA20: 1.1371
Daily SMA50: 1.1393
Daily SMA100: 1.1405
Daily SMA200: 1.1529

Levels:
Previous Daily High: 1.1312
Previous Daily Low: 1.1234
Previous Weekly High: 1.1344
Previous Weekly Low: 1.1234
Previous Monthly High: 1.1586
Previous Monthly Low: 1.1289
Daily Fibonacci 38.2%: 1.1282
Daily Fibonacci 61.8%: 1.1264
Daily Pivot Point S1: 1.1251
Daily Pivot Point S2: 1.1204
Daily Pivot Point S3: 1.1174
Daily Pivot Point R1: 1.1329
Daily Pivot Point R2: 1.1359
Daily Pivot Point R3: 1.1406

Source: https://www.fxstreet.com/news/eur-usd-t ... 1902180920
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EURUSD trades to new highs and tests trend line

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mlawson71 wrote: Wed Feb 20, 2019 3:03 am Were there any fundamentals today that it rallied as it did? Or is it just the result of the double bottom?
Nope. Just a strong long term support and as you predicted last week a double bottom!

EURUSD trades to new highs and tests trend line

Trend line and the 1.13405 are eyed above

The EURUSD trades to new highs and in the process is testing a trend line connecting last week's, and this week's highs. Above that the 38.2% and high from last week comes in at 1.13405.


Earlier I wrote on the ups and downs:

The pair is still trying to find its way, but having a tough time commiting to higher or lower. The area between the 100 and 200 hour MAs is a neutral zone in the middle of the range. Trade above is move bullish. Trade below is more bearish. Flip the coin and hope for the "market" to go your way. That is what the price action and technicals are saying.

The sentiment remains the same except, the bias is now tilted higher but with topside levels gettting in the way.

Source: https://www.forexlive.com/technical-ana ... e-20190219
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EURUSD Technical Analysis: Upside favored on inverse head-and-shoulders breakout

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EUR/USD Technical Analysis: Upside favored on inverse head-and-shoulders breakout

The inverse head-and-shoulders breakout seen in EUR/USD's 4-hour chart validates the bullish view put forward by the falling channel breakout on Monday and represents a bearish-to-bullish trend change (transition from lower highs and lower lows to higher highs and higher lows).

As a result, the common currency could rise to 1.14 in the next day or two. The bullish case would weaken if the spot finds acceptance under the inverse head-and-shoulders neckline, currently at 1.1330.

4-hour chart
Source: https://www.fxstreet.com/news/eur-usd-t ... 1902200258
These users thanked the author ChuChu Rocket for the post:
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Re: EUR/USD

380
mlawson71 wrote: Wed Feb 20, 2019 10:51 pm Now there's not only a double bottom but also a hammer candlestick at the support at 1.1230, I think we may see a further move to the upside.
the real reason why EURUSD is not falling like rock is it is trading at multiyear trendline support and taking support at it. it needs more economical slowdown in eurozone to break it.

though on flip side USDINDEX has broken this multiyear down trend line and is trading above it for a while now showing strength.
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