CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

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

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

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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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%.

EUR/USD Chart with retail and institutional sentiment

*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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