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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

EUR/USD: Euro outperforms again on Fed rate cut likelihoods

Carry trade unwinds on Fed’s maneuverability compared to the ECB.

EURUSD Source: Bloomberg

EUR/USD Technical analysis, overview, strategies, and levels

Manufacturing PMIs (Purchasing Managers Index) out of the Eurozone showed slightly better than expected figures for the bloc, but where Germany's showed ongoing contraction with a sub-50 reading. Out of the US, ISM and Markit’s estimates also disappointed. But for EUR/USD's price, it enjoyed a surge to cross the 1.11s and breach its 50-day, 100-day and 200-day moving averages as seen on the daily chart, giving its short-term daily technical overview more positive technical bias and running in contrast with its long-term negative bear trend channel on the weekly. A part of that may be down to bigger US Federal Reserve (Fed) maneuverability compared to the ECB’s (European Central Bank) 0% rate, and a carry trade unwinding. We've got more data today in the form of preliminary Eurozone CPI (Consumer Price Index) figures expected to show 1.4% growth, though risk-related moves may prove to be the greater factor as US bond yields plummet.

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EURUSD TA Source: IG charts

IG client* and CoT sentiment for EUR/USD

Retail bias shifted to majority short late last week, and since then it has risen from 53% to 61%.

EURUSD sentiment Source: IG charts

EUR/USD Chart with retail and institutional sentiment

EURUSD chart Source: IG charts

*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am.

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