Euro Weekly Forecast – Will the ECB Give any Guidance? EUR/USD and EUR/GBP

EUR/USD, EUR/GBP Prices, Charts, and Analysis

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A range of central bankers and board members have been on the wires this week pushing back against what they see as elevated interest rate cut forecasts. While they may have been partially successful in dampening these expectations, a series of global rate cuts will happen this year, the question being, when will they start?

This Thursday’s ECB meeting will likely be too soon for ECB President Christine Lagarde to start laying out a timetable for the market to follow, with the March 7th meeting probably the very earliest that the central bank will give any strong guidance.

For all central bank policy decision dates see the DailyFX Central Bank Calendar

Next week also sees the latest German and Euro Area PMIs, the German Ifo business report, and German GFK consumer confidence. With the German economy still in the doldrums, all of these reports will need to be watched to get a better understanding of the state of the Eurozone’s largest economy.

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The daily EUR/USD chart broke lower on Tuesday after hitting 1.0950. The pair are currently trading off 1.0850 support from the 200-day simple moving average, while the 23.6% Fibonacci retracement level at 1.0864 is also helping to prop up the pair. Below here, 1.0787 comes into focus. On the way up, 1.0950 before 1.1000.

EUR/USD Daily Chart

Chart Using TradingView

IG retail trader data show 50.28% of traders are net-long with the ratio of traders long to short at 1.01 to 1.The number of traders net-long is 0.52% lower than yesterday and 18.33% higher than last week, while the number of traders net-short is 5.14% higher than yesterday and 0.05% higher than last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall.

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EUR/GBP today made a textbook rebound off longer-dated support around 0.8550. This pair has provided a good range trade over the past months and may test a cluster of recent highs around the 0.8620 level soon. Above here all three simple moving averages guard 0.8650, before the range high at 0.8701 and 0.8715 come into play.

EUR/GBP Daily Chart

What is your view on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.