Ipek Ozkardeskaya
Swissquote Bank Ltd
The significant two-sided volatility in the euro has resulted in the victory of the bears. At this year’s last monetary policy meeting, the European Central Bank (ECB) announced to decrease the size of its monthly purchases from 80 to 60 billion euro, yet to extend the program until December 2017, with possibility of a new extension if needed. President Mario Draghi accentuated that this was not a tapering. The EURUSD first rallied to 1.0873, then plunged to 1.0597. Asian traders joined the euro sell-off and pulled the pair down to 1.0589. The EURGBP rebounded from 0.8572 and is gaining momentum for a potential pullback to its 200-day moving average, 0.8370. The EURJPY tanked to 120.90 and is expected to see resistance at 122.15 (daily Ichimoku cloud top) before the weekly closing bell.
The GBPUSD stepped in the bearish consolidation zone after clearing the critical short-term support at 1.2625 (major 28.2% retracement on Nov 26th to Dec 6th rise). Strengthening negative momentum suggests a further extension of losses to 1.2533 (major 61.8% retracement), before 1.2505 (descending channel base building since Dec 6th). Decent resistance is eyed at 1.2605 (200-hour moving average).
The weakness in the USDJPY remained short-lived. The pair saw a decent demand below its 200-hour moving average (113.70). The pair should resume its rise to 105.00/105.50. Only light offers are eyed pre-105.00 handle.
The sell-off in EURAUD encouraged a positive pick-up in the AUDUSD. A further recovery to 0.7500 could be envisaged, yet option offers could cap the upside at this level before the weekly closing bell.
Gold slipped to $1164 in Asia. Upside attempts are expected to remain capped at $1175/1180 (200-hour moving average / two-week descending channel top).
Dip-buyers took the rein of the market as the barrel of WTI eased to $50.00. Moving forward, the sluggish supply side dynamics in the oil market could reinforce support at $50.00. The current push could target the $54.50/55.00 mid-term resistance.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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