EUR/USD Short-Term Target At 1.1894, Long-Term Target At 1.2400

EUR/USD rises on hawkish comments by Lautenschlaeger Macroeconomic overview:

  • ECB Executive Board member Sabine Lautenschlaeger said the European Central Bank should reduce its asset buys from next year with the aim of ending them altogether, as the factors holding down inflation are temporary. “For even if we phased out our net purchases of bonds entirely, some monetary accommodation would remain in place,” she said. “This is because we reinvest all the money from maturing bonds.”
  • The ECB is due to decide on October 26 whether to continue bond purchases next year and signals coming from policymakers suggest that they will opt for lower volumes but also an extension of the scheme.
  • The EUR/USD rose on hawkish comments by Lautenschlaeger. Also helping sentiment was strong data from Germany. Industrial output posted its biggest monthly rise in more than six years in August, data showed on Monday.
  • The combined production of manufacturing, construction and energy increased by 2.6% on the month after edging down by 0.1% in July. The reading beat market expectations for a 0.7% rise. Data published on Friday showed that strong foreign demand, especially from clients outside the euro zone, drove a bigger-than-expected jump in industrial orders in August. The German economy grew 0.7% on the quarter in the first three months of the year and 0.6% from April to June, driven by increased household and state spending as well as higher investment in buildings and machinery. Recent data suggested the economy is firing on all cylinders again and set for solid growth in the third quarter.

Technical analysis and trading signals:

  • The EUR/USD broke above the Tenkan and 7-day exponential moving average (1.1758) and a close above them today will suggest further upward move. The nearest bulls’ target could be 1.1894 cloud top.
  • We stay EUR/USD long and think current levels are still attractive to buy this pair.

EUR/USD Daily Forex Signals Chart

Source: GrowthAces.com – daily forex trading strategies

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