Intra-Day Market Moving New and Views EUR/USD

Intra-Day Market Moving New and Views EUR/USD

26 Aug 2014 02:18GMT

EUR/USD - ... Despite intra-day blip higher on the euro after hitting a fresh 11-month low today, the fundamental picture of the euro is decidedly bearish. 

The U.K. Telegraph reported ECB has moved closer to adopting further radical measures to ward off a second recession n a spiral of deflation after its 2 biggest economies fell deeper into trouble on Mon. The dual shock of a French govt. reshuffle n weaker-than-expected German figures y'day threatened to add to the malaise in the eurozone, where unemployment remains stubbornly high, n growth is at a standstill. 

In his speech delivered at the Jackson Hole symposium on Fri, ECB President Draghi acknowledged that even long-term inflation forecasts have now fallen below the central bank's 2% mandate. He said the ECB would "use all the available instruments needed to ensure price stability over the medium term". This marked a decisive shift from his previous remarks, in which he had insisted that expectations for inflation were "firmly anchored" around or above the 2% level. 

Y'day, with bonds yields fm eurozone largest economies falling to record lows, n stock markets rallied on the prospect of further stimulus, market is expecting ECB would cut interest rates even below their current record lows next month, n engage in a programme of purchasing asset-backed securities (ABS) ? bundled loans from banks ? at the end of the year. 

EUR/USD - .... For 2 days in a row, Asia bore the brunt of the largest intra-day price swings. Despite meeting renewed selling in thin trading market condition ahead of Asian open on stop hunting, euro easily penetrated yesterday's 1.3183 low to a fresh 11-month trough of 1.3178, however, the single currency quickly pared intra-day loss and rebounded back to 1.3201. 

Current usd's broad-based retreat vs G7 currencies in Asian morning suggests euro still has legs to move higher as Fri's CFTC report revealed euro shorts had climbed to its highest in 2 years, therefore, time is ripe for a short-covering rally to take place any time this week. 

As no EZ data are due out in European morning, technical trading is expected to dominate near term price movement. Bids are noted at 1.3185-80 whilst some offers are tipped at 1.3210/20 with stops touted above there.

Last night, Ukraine Presidential spokesman said that it will hold a new parliamentary election on October 26.