Euro Stays Weak As ECB Stresses On Maintaining QE

Monetary policy was left unchanged at yesterday’s ECB meeting as widely expected, but ECB President Mario Draghi drove home the point that the central bank will continue its focus on maintaining the monthly bond purchase program.

Although no major decisions were announced at this month’s meeting, Draghi managed to talk down the euro which slipped as price rallied briefly to intraday session highs of 1.0932 before giving up the gains to close the day on a weaker note.

Besides the ECB meeting, earlier in the day the Bank of Japan’s monetary policy meeting was also held which saw no changes to interest rates or the QQE purchases. BoJ officials gave a somewhat upbeat assessment of the economy while slightly lowering the inflation forecasts.

Looking ahead, today’s advance GDP numbers from the U.S., UK, and Canada will be the key market events to look forward to.

EUR/USD intra-day analysis

EUR/USD 4 Hour Chart

EUR/USD (1.0865) has found support at 1.0863 – 1.0854 and this could see a minor attempt at aprice to push higher. However, as long as the previous high is not breached, we can expect to see some flat price action. A breakout above 1.0941 high and the support at 1.0854 will be required for the next leg of the move. To the downside, the next main support is seen at 1.0750 – 1.0740, whereas to the upside, 1.1000 remains a key price level of interest that can be targeted.

USD/JPY intra-day analysis

USD/JPY 4 Hour Chart

USD/JPY (111.12) is seen consolidating above the support level 111.00 where prices are being held steady. A breakdown below 111.00 could, however, spell trouble as a decline to 109.50 is quite likely. Price action closed with an inside bar in yesterday’s session which could signify a potential break out in the near term. To the upside, strong resistance is seen at 112.00 – 111.97 which will need to be breached to ascertain further upside in prices.

GBP/USD intra-day analysis

GBP/USD 4 Hour Chart

GBP/USD (1.2907) managed to post some gains yesterday as we see price action attempting to challenge the resistance level at 1.2900. A breakout above 1.2900 will put GBPUSD on thepath to test the upside targets at 1.3000 and 1.3200. But also note that the 4-hour Stochastics is showing a bearish pergence which opens the risk of a downside correction towards 1.2600 if the immediate support at 1.2800 fails to hold prices.

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