CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Disclaimer

Our systems have detected that you are using a computer with an IP address located in the USA. If you are currently not located in the USA, please click “Continue” in order to access our Website.

Local restrictions - provision of cross-border services

Swissquote Ltd is authorised and regulated in the UK by the Financial Conduct Authority (FCA). Swissquote Ltd is not authorised by any US authority (such as the CFTC or SEC) neither is it authorised to disseminate offering and solicitation materials for offshore sales of securities and investment services, to make financial promotion or conduct investment or banking activity in the USA whatsoever.

This website may however contain information about services and products that may be considered by US authorities as an invitation or inducement to engage in investment activity having an effect in the USA.

By clicking “Continue”, you confirm that you have read and understood this legal information and that you access the website on your own initiative and without any solicitation from Swissquote Ltd.

If cookies are currently disabled on your computer, you will be required to continue accepting this legal information for every new page visited on this website. In order to avoid this, please enable cookies on your computer.

Research Market strategy
by Swissquote Analysts
Daily Market Brief

Investors cautious, EUR downside presists

1

Investors remain cautious ahead of key week

By Arnaud Masset

Financial markets tend to favor the greenback following the recent release of strong US job data. There is therefore little upside potential for the single currency as market participants are waiting for Fed Governor Jerome Powell testimony on Capitol Hill, which should confirm that the Federal Reserve will remain patient on cutting interest rates, thus putting additional pressures on EUR. The release of Eurozone’s largest economy output and trade data also had a limited impact on the currency as investors expect the ECB to implement a significant reduction in interest rates as well as potential new quantitative easing measures.

EUR weakness is likely to sustain as the single market fundamentals remain on a downward trend. Despite an uptick in German production of 0.30% in May compared to prior month, hope of a gradual return to normal is questionable as the recent increase follows a major slump of -2%, a level not seen since August 2014. Similarly, the recent rise in May month-on-month exports to 1.10% (prior: -3.70%) is also more of a counterbalance, as the weakness of production orders is still being felt, pointing to a slight shrinkage of 2Q GDP. Under current circumstances, EUR is likely to remain under pressure, as the US is likely to slap tariffs on the EU by the end of this summer while the ECB will be launching a new series of targeted long-term refinancing operations in September.

EUR/USD is currently trading at 1.1198, approaching strong support at 1.1194 (18/06/2019 low) and heading along 1.1190 short-term.

EUR downside momentum persists

By Vincent Mivelaz

Financial markets tend to favor the greenback following the recent release of strong US job data. There is therefore little upside potential for the single currency as market participants are waiting for Fed Governor Jerome Powell testimony on Capitol Hill, which should confirm that the Federal Reserve will remain patient on cutting interest rates, thus putting additional pressures on EUR. The release of Eurozone’s largest economy output and trade data also had a limited impact on the currency as investors expect the ECB to implement a significant reduction in interest rates as well as potential new quantitative easing measures.

EUR weakness is likely to sustain as the single market fundamentals remain on a downward trend. Despite an uptick in German production of 0.30% in May compared to prior month, hope of a gradual return to normal is questionable as the recent increase follows a major slump of -2%, a level not seen since August 2014. Similarly, the rise in May month-on-month exports to 1.10% (prior: -3.70%) is also more of a counterbalance, as the weakness of production orders is still being felt, pointing to a slight shrinkage of 2Q GDP. Under current circumstances, EUR is likely to remain under pressure, as the US is likely to slap tariffs on the EU by the end of this summer while the ECB will be launching a new series of targeted long-term refinancing operations in September.

EUR/USD is currently trading at 1.1198, approaching strong support at 1.1194 (18/06/2019 low) and heading along 1.1190 short-term.

 
Live chat