This has formed a bearish ‘death cross’ which can at times precede a turn lower. Keep a close eye on the falling trend line from late August, that may also reinstate the focus to the downside. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. The USD/JPY (or US Dollar Japanese Yen) currency pair is one of the ‘Majors’, the most important pairs in the world.
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This forex pair is particularly interesting in light of Brexit and the US-China tensions. Find out how you can take advantage of EUR/USD price movements with IG. On 29 September, about 40% of retail traders were net long EUR/USD. Exposure to the upside declined by roughly 15% and 18% over a daily and weekly basis respectively. From here, the combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias in EUR/USD. You can profit from trading EUR/USD if you trade the currency pair via spread bets or CFDs.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
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This is represented in percentage form (see image below) which aids traders in identifying market imbalances which could lead to possible opportunities. Use this to see how IG client accounts with positions on this market are trading other markets. Data interactive brokers forex review is calculated to the nearest 1%, and updated automatically every 15 minutes. In this chart, the close price is shifted behind so it corresponds to the date when the price for that week was forecasted.
The best EUR/USD trading strategies to use will depend on your personal trading style. There are many forex strategies to choose from, enabling you to determine when it’s time to enter and exit a trade. These include the RSI indicator strategy, momentum indicator strategy and breakout trading strategy. The European Central Bank (ECB) lowered the benchmark interest rate, the deposit facility, by 25 basis points (bps) to 3.5% as expected. The ECB also lowered interest rates on the marginal lending facility and the main refinancing operations by 60 bps.
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“The Governing Council will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction,” the ECB noted in the policy statement. In the post-meeting press conference, ECB President Christine Lagarde refrained from hinting at the timing of the next rate cut. Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs. You could say that the euro and the US dollar are safe currencies, because both have traditionally been viewed as ‘safe havens’. However, forex is a volatile market and currency values fluctuate continuously. So, whether EUR and USD are safe currencies will always depend on liquidity, volatility and economic events (such as Brexit).
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We have shown how sentiment/IGCS can be a unique, proprietary and potentially helpful addition to a trader’s approach. In subsequent IGCS articles in this market sentiment sub-module, we will go through the implementation and flexibility of this tool in varying trading circumstances. Get The Week Ahead, our free rundown of the coming week’s market-moving events and forex pairs to watch, delivered to your inbox every Sunday.
On a yearly basis, the Producer Price Index (PPI) rose 1.7% in August in the US, down from 2.1% in July and below the market expectation of 1.8%. The probability of a 50 bps Federal Reserve (Fed) rate cut in September climbed above 40% after this data, per CME FedWatch Tool, and triggered a USD selloff. This graph is available for each time horizon (1 week, 1 month, 1 quarter).
The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. For example, the EUR/USD chart below shows the projectible nature that can occur with IGCS. The highlighted are on the chart exhibits an increase in net short positions from retail traders which coincided with a rise in price action (EUR appreciation) on the price chart itself. Simply put, retail traders contribute only a certain percentage of market input so naturally other factors will have influence on the respective market. The two most well-known are open interest in options, which largely applies to stocks, and the Commitment of Traders Report (CoT).
- Each participant’s bias is calculated automatically based on the week’s close price and recent volatility.
- Supply closures from Hurricane Francine which is ravaging the Gulf of Mexico are another bullish factor.
- Countries started to do more business with each other after the euro’s introduction due to the lack of currency risk, with the resultant rise in gross domestic product (GDP) growth across the eurozone causing EUR/USD’s price to surge.
- During this open period, EUR/USD tends to be more liquid and spreads are generally tighter.
- The uncertainty surrounding the final Brexit deal continues to affect euro pricing, with Britain expected to leave the EU in October 2019.
Gold preserves its bullish momentum and trades near $2,580 after setting a new record-high slightly above this level. The 10-year US Treasury bond yield stays in the red below 3.7% as markets reassess the odds of a large Fed rate cut, helping XAU/USD push higher. IG Client Sentiment (IGCS) is a tool that traders can use in conjunction with a broader technical and/or fundamental strategy. IGCS incorporates retail trader positioning (long and short) to formulate a sentiment bias.
The euro may be readying to push higher against the US dollar based on recent signals from IG Client Sentiment (IGCS). At the beginning of September, IGCS implied that about 35% of retail investors were canadian forex review net long EUR/USD. Since then, that increased to around a 45% upside bias towards the end of the month.
