ECB

DAX technical levels and factors to watch on the German index as it tests the pivotal 18,000 level with the focus turning on the ECB rate decision, while US sticky inflation concerns make unwelcome return ahead of PPI data.

US dollar eases off after initial bounce, after US NFP rose by 300K, although it was boosted by part-time jobs. US CPI and ECB policy decision coming up next week, which should provide some direction for the EUR/USD.

Tensions surrounding the Middle East has unsettled markets. US indices such as the S&P 500 are on track for their worst week of the year, crude oil reached a fresh YTD high and the risk-off sentiment was even enough to knock gold from its record. Traders therefore need to be on guard for headline risks surrounding the Middle East next week, alongside the usual bouts of economic data and central bank meetings.

US data will continue to play a major role for EUR/USD, with PPI and Retail Sales on tap tomorrow. See the key levels to watch!

EUR/USD looks to ECB rate decision. USD/JPY falls after Powell and as hawkish BoJ bets build.

EUR/USD is on track for its smallest weekly range since September 2021, although 1-week implied volatility levels that we could see more action next week.

EUR/USD is testing key support near 1.0800 with major crosswinds from month-end flows, the Fed, and NFP this week.

The European Central Bank (ECB) is likely to acknowledge that the current state of the Eurozone economy, with growth hovering around zero, is not great. However, it will probably highlight more forcefully signs suggesting that inflation is not making swift progress towards their 2% target, particularly in light of the persistent pressure on wages.

EUR/USD’s early week rally is reversing, keeping the downward bias intact within a bearish channel...

EUR/USD must be one of the most well-behaved FX pairs in the world right now, sitting comfortably in a long-running downtrend, refusing to stray too far from the current trajectory no matter what the world is throwing at it.

The durability of the EUR/USD rebound will be put to the test over the next 48 hours as traders face a raft of events that could make-or-break the medium-term outlook for US bond yields and the USD.

EUR/USD faces a stern test in the days ahead, battling divergent fundamentals, increasing risk aversion and a technical backdrop that’s as bearish as any in the G10 FX universe right now.

The ECB delivered a relatively dovish hike whilst US data once again outperformed. And that was the perfect catalyst to send EUR/USD to a 4-low (and speculative positioning suggests there may be further downside to come). WTI crude oil rose above $90, and it appears to have more fuel in the tank to perhaps head for the October high.

With an ECB interest rate decision and three US data points sandwiched in between, we could be in for an interest hour's trade on EUR/USD. And that likely explains why the 1-day implied volatility band is more than twice its 20-day average.

The combination of a key US inflation report and finely-balanced ECB interest decision should keep EUR/USD on trader’s radars. Although we also have plenty of data out from China which could sway sentiment for risk assets, including CPI/PPI, loan growth, investment, retail sales and employment.

The breakdown of EUR/USD does not bode well for investor risk appetite moving forward.

First up, the Fed will take centre stage later today, when it will most likely – almost certainly – deliver what everyone expects, a 25-basis point rate hike. The dollar’s reaction will depend entirely on the FOMC’s hints about the next meeting in September. Meanwhile, the ECB is also facing a dilemma of whether to pre-commit to another hike in September.