Euro Falls after European Commission Lowers Growth Forecasts

OctaFx Analyst Team OctaFX

The New Zealand dollar rose against the USD after the RBNZ made its monetary policy decision. The bank left the official cash rate unchanged at 0.75%. The rates have remained at this level since 2016. The accompanying statement said the economy is doing well but it could see some tough times in 2019 before recovering in 2020. It also said that rates will remain unchanged in 2019 and 2020. This is because while the country is in full employment, inflation has remained below the target of 2%.

The USD moved higher against its peers ahead of the monetary policy release by the Fed. The decision will be released at 19:00 hours (GMT). The bank is expected to leave interest rates unchanged at 2.25%. Traders will pay close attention to the statement, which will give an indication of the future of rate hikes. Most investors and analysts expect the statement to show that the Fed will hike interest rates in December. This is amidst criticism from the US president who has accused the Fed of working against his agenda.

The euro fell against the USD after the European Commission released the autumn economic forecast. The document showed that the euro area economy will ease from a 10-year high of 2.7% in 2017 to 2.5%. The economy will then moderate further to 1.9% and 1.7% in 2019 and 2020 respectively. The EU27 will ease to 2.2%, 2.0%, and 1.9% in 2018, 2019, and 2020 respectively. The commission attributed the slowdown in growth to the current uncertainties that have been caused by the trade conflict. Recent data from the EU have shown this weakness with the services and manufacturing sectors showing slow growth.

EUR/USD

The EUR/USD pair fell from yesterday’s high of 1.1500 to an intraday low of 1.1400. This decline was attributed to the weak EU outlook and the anticipation of Federal Reserve. On the 30-minute chart, the main oscillators like the Relative Strength Index, Commodities Channel Index (CCI), and the MACD are pointing to further downward movements as shown below. The same trend is predicted by the moving averages. This trend is likely to continue before the Fed makes its decision. If it does, it will likely test the 1.1350 support.

NZD/USD

The NZD/USD pair continued the upward trend started in October and reached an intraday high of 0.6818. This was the highest level since August this year. On the four-hour chart, the pair’s RSI is at 72, which is slightly lower than the yesterday’s high of 82. The Bulls Power has fallen from yesterday’s high of 0.0088 to the current level of 0.0030. This is an indication that the pair could have a slight downward trend, which will likely see it test the important level of 0.6800.

USD/JPY

The USD/JPY rose to an intraday high of 113.82. This was the highest it has been since August this year. The pair was continuing a bullish trend started on October 26 when it reached an important low of 111.37. The Average True Range is currently showing no volatility as traders wait for the Fed guidance. The RSI on the hourly chart is at 59, which is an indication that the pair could continue moving high. This is confirmed by the double EMA, MACD, and ADX as shown below. More upward moves will see it test the important 114 resistance level.

Author

OctaFx Analyst Team

OctaFX

OctaFX is a market-leading forex broker, providing personalised forex brokerage services to customers in over 100 countries worldwide.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.