EURUSD, Daily
All eyes on the ECB. There is little doubt that Draghi will announce another QE program and that monthly purchase levels will be cut back from current EUR 60 bln a month. The main question is how much will be cut, and how long the new program will run? We initially expected a trimming to EUR 40 bln for 6 months, but it seems “less for longer” is gaining traction. A cut to EUR 20-30 bln a month and a duration of 9 months would open the way to a full phasing out of next asset purchases at the end of September next year. It seems likely though that Draghi won’t fully commit to a final end date yet, and deliver the net purchase reduction within a wider dovish framework of forward guidance that highlights again that rates won’t rise until well after the end of asset purchases, which would push the first rate hike out to 2019. Data releases won’t change the ECB outlook at this stage and we expect confidence readings including PMIs and Ifo to confirm that the recovery continues to broaden across countries and sectors.
EURUSD has slumped from its post Jackson Hole (August 25) induced rally high of over 1.2100 to October lows under 1.1700. Today its is again below the key 20 day moving average on the Daily chart finding some support in the 1.1740 -1.1700 zone. Resistance to a move higher is the now strongly established trend line and 38.2 Fibonacci retracement level at at 1.1830-40 zone.
Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.
Recommended Content
Editors’ Picks
AUD/USD weakens further as US Treasury yields boost US Dollar
The Australian Dollar extended its losses against the US Dollar for the second straight day, as higher US Treasury bond yields underpinned the Greenback. On Wednesday, the AUD/USD lost 0.26% as market participants turned risk-averse. As the Asian session begins, the pair trades around 0.6577.
EUR/USD stuck near midrange ahead of thin Thursday session
EUR/USD is reverting to the near-term mean, stuck near 1.0750 and stuck firmly in the week’s opening trading range. Markets will be on the lookout for speeches from ECB policymakers, but officials are broadly expected to avoid rocking the boat amidst holiday-constrained market flows.
Gold price drops amid higher US yields awaiting next week's US inflation
Gold remained at familiar levels on Wednesday, trading near $2,312 amid rising US Treasury yields and a strong US dollar. Traders await unemployment claims on Thursday, followed by Friday's University of Michigan Consumer Sentiment survey.
Bitcoin price drops, but holders with 100 to 1000 BTC continue to buy up
Bitcoin price action continues to show a lack of participation from new traders, steadily grinding south in the one-day timeframe, while the one-week period shows a horizontal chop. Meanwhile, data shows that some holder segments continue to buy up.
Navigating the future of precious metals
In a recent episode of the Vancouver Resource Investment Conference podcast, hosted by Jesse Day, guests Stefan Gleason and JP Cortez shared their expert analysis on the dynamics of the gold and silver markets and discussed legislative efforts to promote these metals as sound money in the United States.