Euro slides ahead of the ECB rate decision
|The euro slumped against the US dollar as traders waited for the upcoming interest rate decision by the European Central Bank (ECB). The bank will start its monetary policy meeting on Wednesday and deliver its decision on Friday. With most European countries delivering vaccinations, and with the euro weakening, analysts believe that the bank will not tweak the current policy. Also, it will possibly not hint at future interest rates. Earlier today, Christine Lagarde delivered a speech in which she warned about the sustained challenges to the European recovery. Also, the Italian statistics agency delivered weak December inflation data.
The Australian dollar declined after data from China showed that retail sales grew at a slower pace than expected. In general, retail sales rose by 4.6% in December, slower growth than the expected increase of 5.5%. The sales rose by 5.0% in November. Further data showed that the country’s economy continued to grow in the fourth quarter. In total, it expanded by an annualised rate of 6.5%. This was mostly because of a 2.9% increase in fixed-asset investment and high external demand.
Global stocks declined today ahead of key earnings set for this week. In the United States, futures tied to the Dow Jones and S&P 500 indices declined by 0.10%. The main indices will be closed today for the Martin Luther King holiday. This week, some of the companies that will deliver their earnings are Bank of America, Goldman Sachs, Netflix, and IBM, among others. In Europe, the CAC 40 index declined after a French retailer pulled its announced acquisition of Carrefour. In the UK, the FTSE 100 was little changed ahead of BHP Group, Antofagasta, and Rio Tinto trading statements.
EUR/USD
The EUR/USD started a bearish trend last week when it rose to 1.2350. On the four-hour chart, the price has managed to move below the 23.6% and 38.2% Fibonacci retracement level. Also, they have moved below the 25-day and 15-day moving averages. The Relative Strength Index (RSI) has also continued to decline. Therefore, the pair will likely continue falling as bears target the 50% retracement at 1.1980.
GBP/USD
The GBP/USD pair dropped to an intraday low of 1.3538. On the four-hour chart, the pair formed a double-top pattern at 1.3705 last week. The short and longer-term moving averages also moved below the price. Also, the Relative Strength Index (RSI) and the MACD have also moved to the oversold level. Therefore, the pair will possibly continue falling as bears target the neckline of the double-top at 1.3447.
UK100
The FTSE 100 index declined slightly ahead of key earnings this week. The index is trading at £6,735, which is below this year’s high of £6,945. On the four-hour chart, the price is slightly below the 25-day and 15-day EMAs. It is also slightly above the important support of £6,637 while the signal and histogram of MACD have moved below the neutral line. Therefore, the index will likely break-out in either direction in the near term.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.