Listen to the market mood for the EURUSD currency pair in the coming session:

Weak EUR
The Euro is weak with many downward forces dragging it down: The major euro economies are struggling with weak German Growth and falling French manufacturing data. The ECB’s main interest rates are at historically low levels, German 10-year bond yields are only paying minus 0.40bps and the EU is still to agree on a trade deal with the UK. Last week institutional net short positions increased once more with the COT report showing 86K contracts short.

Strong USD
The USD, by contrast, is in a much stronger position. The US 10-year yield is at 1.58% (around 200bps more than Germany’s rate of -40bps) and Fed Chair Powell says the economy is in a ‘very good place’.

Therefore, expect EURUSD sellers at pullbacks for the medium term.

Risks to this outlook
Any positive eurozone growth news or negative USD news on the US economy.

HYCM Lab is a financial analysis source that provides regular insights on how global news affects the markets including forex, commodities, stocks, indices, and cryptocurrencies*. Run by the HYCM team, it equips traders with everything needed to make informed trading decisions.