EUR/USD Sentiment Bullish but OpenBook Gurus Cautious
(eToro Blog) The Euro managed to hold onto gains it made yesterday following the news that business sentiment in Germany improved unexpectedly. German data points has driven investors’ sentiment to a great extent this week, as dismal PMI data on Wednesday ushered in concerns that the Eurozone’s proximity to a full-blown recession was edging ever closer. With Germany viewed as the “key” driver of the Eurozone’s economy, expectations of improvement there tend to have a spill-over effect.
On OpenBook, EUR/USD sentiment is predominantly bullish as the pair is currently lower at 1.3366, following yesterday’s 1% rally on the IFO news. One OpenBook trader, in particular, is wary of that rally believes that yesterday’s movement was unreasonable. Guru sadiqashanaz97 is worried of an approaching storm and says that that kind of movement seen yesterday is more typical at the open and close of a month, and given that this is the last Friday of the month is expecting even more volatility. As such, the trader is moving cautiously to gauge direction today. One short position that was opened yesterday is already showing a profit, but the other bought at the lower end of yesterday’s trading range would need to see a good sized rout to turn green.
OpenBook guru Gavinwright also doesn’t believe the price can be sustained in today’s European market; he closed out a short position a while ago with a 13% gain for himself and his 711 copiers; of the three short positions opened yesterday, one is approaching the break-even point and the other two would need to see a stronger reversal to turn a profit.
German IFO supported the bullish sentiment yesterday and today’s release of German GDP may ultimately drive the trend in the opposite direction. According to the German Statistics Office, 4th quarter GDP on a quarter-on-quarter was reported at -0.2% in line with the consensus forecast, while the previous quarter was revised to -0.2% from 0.6%. Year-on-year 4th quarter GDP was also in line with forecasts at 1.5%, with the previous reading revised to 1.5% from 2.6%.
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