Skip to content

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

EUR/USD outlook: EUR/USD vulnerable to month-end volatility

Euro recovers from US Dollar short squeeze, however, EUR/USD remains vulnerable below $1.192.

Euro dollar Source: Bloomberg

Choppy price action across the G10 complex with the Euro hovering within close vicinity to the $1.19 handle. That said, with the US Thanksgiving Holiday and month-end upon us, market liquidity is likely to be lighter and thus flow driven moves stemming from month-end rebalancing is likely to be exacerbated as evidenced on Monday. While the Euro has recovered from the recent USD short squeeze, EUR/USD has stopped short of reaching key topside resistance at $1.192, as last week’s high zone holds ($1.188-$1.90).

The Euro, however, is not without short-term risks, which as it stands, has largely taken a blind eye to. Poland and Hungary have vetoed further progress over the EU Budget and Recovery Fund in response to the rule of law. Although, with minimal signs of a solution to break the impasse, concerns will likely rise over a delay in the implementation of the recovery fund. A risk that markets appear to be under-pricing at this current stage.

To that end, with US Dollar short positioning remaining stretched, their remains a continued risk of USD short squeezes, leaving EUR/USD vulnerable to pullbacks towards $1.18. A break below raises scope for a move to $1.175, while a move above $1.192 would negate an initial downside bias.

EUR/USD chart: hourly timeframe

EUR/USD chart Source: Refinitiv
EUR/USD chart Source: Refinitiv

IG client sentiment: EUR/USD

Retail trader data shows 28.51% of traders are net-long with the ratio of traders short to long at 2.51 to 1. The number of traders net-long is 6.98% lower than yesterday and 16.78% lower from last week, while the number of traders net-short is 4.38% lower than yesterday and 2.74% lower from last week.

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

Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/USD-bullish contrarian trading bias.

EUR/USD client sentiment Source: DailyFX
EUR/USD client sentiment Source: DailyFX

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.