EUR/USD PRICE, CHART, AND ANALYSIS
- ECB Minutes show a majority of members voted for a 50 basis point hike.
- EUR/USD unchanged but next week’s heavy data calendar will now be key.
According to the latest European Central Bank minutes, a large majority of voting members agreed to hike rates by 50 basis points, although it was acknowledged that ‘in the current situation of heightened uncertainty a decision had to be taken with imperfect information’. The report also showed that ‘some members would have preferred not to increase the key rate until the financial market tensions had subsided’. Projected Euro Area growth for 2023 was revised up by 0.5% to 1.0% while the 2024 and 2025 projection of 1.6% growth was weaker than projected in December.
Looking ahead to next week, data will be the driver of the next move in the single currency. Important jobs, growth and inflation data from Germany are released over the week, alongside the first look at Euro Area growth. All of these releases have the ability to move the market.
EUR/USD barely moved after the releases on the Minutes and currently trades around 1.0965 in a very restrictive range. Short-term support is seen around the 1.0900/1.0910 area while prior resistance at 1.1033 remains intact.
Chart via TradingView
Retail Trader Boost Net-Longs
Retail trader data show 44.16% of traders are net-long with the ratio of traders short to long at 1.26 to 1.The number of traders net-long is 1.66% lower than yesterday and 43.29% higher from last week, while the number of traders net-short is 3.21% lower than yesterday and 24.08% 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. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse
lower despite the fact traders remain net-short.
What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.