Jump to content

Risk event for the week starting Monday 11 July: German ZEW; US CPI

Recommended Posts

With recent declines in EUR/USD, Daily FX's Nick Cawley wants to find a better price to enter a short position. Nick also looks at German business confidence and US inflation data which could disturb the trade.



 Jeremy Naylor | Writer, London | Publication date: Friday 08 July 2022 



Welcome, let's take a look now at a Risk Event for the week starting Monday 11th July.

And for this, we're now off to DailyFX to be joined by Nick Cawley. Nick, good to catch up with you. I know you're going to be talking about the EUR/USD.

As we are recording at the moment we are still awaiting non-farm payrolls (NFP) data, but I know this Risk Event is focused as well on next week's trade. Explain more about your thinking around this EUR/USD proposition.

Yeah good morning to you, Jeremy. There are a couple of, sort of, fairly big economic prints early next week which could affect the value of EUR/USD.

As you said, we have non-farm payrolls coming up today. But next Tuesday, we have the latest look at the ZEW readings for the Eurozone and for Germany, and they're expected to be even weaker. They did improve marginally last month, but in July, the numbers are expected to turn further negative, a euro negative.

And then on Wednesday, we have the latest look at the latest American inflation, the US CPI, which is expected to nudge a tickle higher.

EUR/USD chart

So the trade that I'm looking to do is I'm looking to go short EUR/USD, but I'm finding it difficult at current levels.

If you look at the daily chart, what we can see here is that when we had a technical break of the $1.0340 level, which we saw on Tuesday, we saw quite a sharp reaction. And now $1.0340 becomes fairly solid resistance. So what I'd be looking to do is I'd be looking to try and get a short of the EUR/USD around one of these events, either the NFP today, ZEW on Tuesday, or CPI on Wednesday, around the $1.0280 level.

If we get a bounce back to around the $1.0280 level, get a short in there, I'd have a stop-loss around the $1.0360 level. And my target would be parity as I think parity is still very much on the cards for EUR/USD.

Interesting proposition that, Nick. Very, very briefly, a lot of people now beginning to talk about parity. Is there a sort of a magnetic attraction, do you think, to this possibly now?

Yeah, I do think there is. And I think that you will probably get some quite interesting price action as you get to parity as well. As you say, I think that there has got this magnetic attraction. And yeah, I think quite a few people are geared up for this move and I do believe it's likely. We'll have to see what happens.

Nick, thanks very much indeed, have a good weekend. That's the Risk Event for the week starting Monday 11th July.



risk event of the week.PNG

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 30/09/23 13:08
  • Posts

    • The crypto market appears to be showing signs of recovery, with significant improvements in the Sharpe Ratios of Bitcoin, BGB, and Ethereum, according to an article published on Friday.  The Sharpe Ratio, a measure used to understand the return of an investment compared to its risk, has seen a notable increase for both cryptocurrencies. Bitcoin's Sharpe Ratio has risen from -2.4 to 0.68, while Ethereum and BGB have also experienced a similar uptrend. This change signifies higher returns at lower risk, which is expected to attract more investors to the crypto market. In addition to the improved Sharpe Ratios, increased network activity and trading volume as shown on CEXs like Bitget, Binance, and a few DEXs are suggesting a healthier market state. The current trading prices of Bitcoin, reflect this overall positive market sentiment. As of Friday, Bitcoin was trading at $27,069.73, BGB at $0.454 and Ethereum at $1,677.89. These developments are significant as they indicate reduced risk in the crypto market. The increase in the Sharpe Ratios for Bitcoin, BGB, and Ethereum suggests that these cryptocurrencies are becoming less risky investments, which could potentially lead to an influx of new investors into the market.  Could this rise in Sharpe Ratios coupled with increased network activity and trading volume point towards a recovering and less risky crypto market?
    • Hi, That's great, thank you very much. Very helpful! Many thanks.
    • Texas Instruments Inc., Elliott Wave Technical Analysis Texas Instruments Inc., (TXN:NASDAQ): Daily Chart, 29 September 23 TXN Stock Market Analysis: We have been moving lower as expected from the previous forecast. Looking for continuation lower as there is an incomplete bullish sequence. Looking for extension lower in wave {iii}. Downside target stands below wave (W). TXN Elliott Wave Count: Wave {iii} of C. TXN Technical Indicators: Below al averages.   TXN Trading Strategy: Looking for shorts on the way down.   TradingLounge Analyst: Alessio Barretta Source : Tradinglounge.com get trial here!       Texas Instruments Inc., TXN: 4-hour Chart, 29 September 23 Texas Instruments Inc., Elliott Wave Technical Analysis TXN Stock Market Analysis: As we are getting an overlapping structure in what could be a wave {iii} there is a high chance we will see an acceleration lower to then see a series of fours and fives.   TXN Elliott Wave count:  Wave (iii) of {iii}. TXN Technical Indicators: 20EMA as resistance. TXN Trading Strategy: Looking for shorts on the way down.
  • Create New...