EUR/USD Pushes Higher on ECB Rate Hike Commentary


EUR/USD Price, Chart, and Analysis

  • ECB hawks are out in power following yesterday’s rate of interest hike
  • Euro Area inflation stays elevated and sticky.

Recommended by Nick Cawley

How to Trade EUR/USD

Most Read: ECB Delivers 50bps Hike Despite Banking Sector Woes, EURUSD Indecisive

The European Central Bank (ECB) hiked rates of interest by 50 foundation factors yesterday and additional charge will increase could be anticipated in keeping with coverage maker commentary out earlier at this time.

ECB Villeroy de Galhau – We determined to do what we stated we’d do charges. (Our) Priority is to battle inflation.

ECB Kazimir – Need to proceed with charge hikes however no want to take a position in regards to the resolution in May. Core inflation is sticky and upside dangers to inflation dominate. ECB not on the ending line.

ECB Simkus – The February core inflation dynamics are worrying. I nonetheless imagine this wasn’t the final rate of interest hike. The terminal charge hasn’t been reached. Wage pressures are gaining extra energy on core costs.

Yesterday’s 50bp charge hike by the ECB whereas anticipated, was solely agreed upon by policymakers after the Swiss National Bank (SNB) stated that it will open a Swiss Franc 50 billion lending facility for Credit Suisse, in keeping with an ECB sources report. The ECB additionally feared that in the event that they didn’t undergo with a half-point enhance that traders may even see their inaction as a trigger for concern. President Lagarde particularly stated on the February assembly that the central financial institution would elevate charges by 50bps.

The newest Euro Area inflation information reveals why the ECB is changing into extra adamant that further charge hikes are wanted. The last figures for February present annual headline inflation working at 8.5%, down one-tenth of a proportion level from the prior month, whereas core inflation rose to five.6% from 5.3% in January.

According to information compiler Eurostat, ‘The lowest annual rates were registered in Luxembourg (4.8%), Belgium (5.4%) and Spain (6.0%). The highest annual rates were recorded in Hungary (25.8%), Latvia (20.1%) and Czechia (18.4%). Compared with January, annual inflation fell in fifteen Member States, remained stable in two and rose in ten.’

For all market-moving occasions and financial information releases, see the real-time DailyFX Calendar

EUR/USD is shifting greater at this time, buoyed by charge hike speak, and eyes a cluster of latest highs and the 50-day shifting common round 1.0690 to 1.0760. A confirmed break above right here opens the way in which to 1.0791, shortly adopted by 1.0800.

EUR/USD Daily Price Chart – March 17, 2023


Chart through Buying and sellingView

of shoppers are internet lengthy.

of shoppers are internet quick.

Change in Longs Shorts OI
Daily -21% 10% -8%
Weekly 0% 1% 0%

Retail Positioning is Mixed

Retail dealer information present 53.61% of merchants are net-long with the ratio of merchants lengthy to quick at 1.16 to 1.The variety of merchants net-long is nineteen.29% decrease than yesterday and 11.06% decrease from final week, whereas the variety of merchants net-short is 21.63% greater than yesterday and seven.03% decrease from final week.

We usually take a contrarian view to crowd sentiment, and the actual fact merchants are net-long suggests EUR/USD costs could proceed to fall. Yet merchants are much less net-long than yesterday and in contrast with final week. Recent modifications in sentiment warn that the present EUR/USD value development could quickly reverse greater regardless of the actual fact merchants stay net-long.

What is your view on the EURO – bullish or bearish?? You can tell us through the shape on the finish of this piece or you’ll be able to contact the writer through Twitter @nickcawley1.

Source link


Please enter your comment!
Please enter your name here