Eur/usd - page 210
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ECB's Coeure: Too Early to Ask for QE
The euro area hasn't sunk into a deflationary phase, despite the recent figures, European Central Bank (ECB) Executive Board member Benoit Coeure said on Thursday, adding that it would be "too early to ask" for full-blown quantitative easing.
"The euro zone isn't in deflation," Coeure said in radio interview with station France 24.
His comments come a day after the Eurostat showed in its preliminary reading that price growth in the currency bloc turned negative over the past month, marking the first negative reading since the height of the global financial crisis five years ago. Much of the decline was due to lower energy prices.
Oil slump
In the interview, Coure pointed to this fact, calling the ongoing tumble in crude prices "good news for the European economy," as it is expected to boost the purchasing power of households and businesses.
At the same time, however, the trend makes things more difficult for the ECB, he admitted. In these circumstances, he cautioned that the key question for the bank is whether weak consumer prices are temporary or more long-lasting. If they prove durable, "it becomes much more concerning to us."
However, he declined to comment on what the ECB will do at its January 22 meeting, but said any stimulus must be fashioned in a way that creates confidence and takes into account the concerns of individual Governing Council members.
EURUSD remained bearish yesterday, short, medium and long-term technical trends remain bearish, mirroring fundamental concern about the EU and ECB stimulus forecasts.
I remain short-term bearish under 1.1850 but risk of an oversold pullback is too great to get a solid reward/risk setup here.
EUR / USD continued to fall yesterday.
The positive divergence between the RSI and the price action reveals a time of slowing down, and so it is possible that we may see a smaller recovery before the next downturn.
Regarding the broader picture, the broader downward trend is still in force.
R3 - 1.19336
R2 - 1.18903
R1 - 1.18404
Daily Std. Pivot - 1.17971
S1 - 1.17472
S2 - 1.17039
S3 - 1.16540
1.1800 will be strong support price will not break it easily. price is completely oversold
ECB's Lautenschlaeger: Full-Blown QE Only 'Last Resort'
Affirming German opposition to full-scale QE on the old continent, European Central Bank (ECB) Executive Board member Sabine Lautenschlaeger said on Friday that conditions in the economy aren't ripe for government bond purchases.
"The purchase of state bonds is the last resort of monetary policy," Lautenschlaeger told German magazine Der Spiegel in an interview to be published on Saturday.
"There must be an appropriate balance between the risks and rewards of such a program and I don't see this at this point in time," she continued. "To me government bond purchases are the 'ultima ratio' of monetary policy. The benefits and risks of such a program must be an appropriate; I do not think this is the case at the moment."
'No deflationary developments'
Speaking further, she claimed that she doesn't see a deflationary development in the euro area, even despite the latest figures from Eurostat revealing negative growth in consumer prices in the bloc in December - for the first time in years.
"We are seeing a persistently low inflation rate partly due to sharp declines in energy and food prices. But I currently cannot detect that consumers are delaying purchases because they are counting ongoing price declines."
Her comments came roughly two weeks before the bank's rate-setting body convenes in Frankfurt, with markets betting that the meeting will bring an announcement of further monetary stimulus - in the form of sovereign debt purchases.
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EUR/USD forecast for the week of January 12
The EUR/USD pair initially fell during the course of the week, dropping below the 1.18 handle. This is a level that is massively important, as it is supportive on the monthly charts, going back years. Because of that, we recognize that any buying pressure here could be the end of the longer-term downtrend. We don’t know that yet obviously, but if we were to have a trend change, it would be in this general vicinity. With that being the case we are watching this area with great interest, and will be trying to figure out whether or not this market has the ability to continue plowing lower, or if we finally have reached the bottom.
Looking at this chart, we recognize that if we break down below the bottom of the hammer, we could have the floor open up and the EUR/USD pair could find itself grinding all the way down to the 1.10 level given enough time. On the other hand, if we break above the 1.20 level, we could very quickly find yourselves 1.2350, and then possibly the 1.25 level. If we broke above there, at that point we would have to consider the trend completely changed.
However, when you look at a trend change, they tend to be very sloppy a nasty affairs, so it will be very erratic. You have to be able to hang onto a very volatile position if you are trying to play a trend change, and it won’t be easy to do. However, the Euro has been sold off for so long you have to begin to wonder whether or not there’s anybody out there willing to sell at this point?
On the other hand, if we do get the breakdown you can anticipate this being a market that you can sell rallies as they appear. Regardless what happens, you can expect a lot of volatility and choppiness going forward. The fact that the nonfarm payroll numbers could move the market below the support has us believing that perhaps is more upside risk at this point than down.
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as a newcomer i like to trade Euro Usd pair that speed is too slow to make profit.using this pair i can make profit in a short time.
EUR/USD weekly outlook: January 12 - 16
The dollar fell against the euro on Friday after the latest U.S. jobs report indicated that the Federal Reserve could keep rates on hold for longer, prompting investors to book profits in the greenback.
The U.S. economy added 252,000 jobs in December the Labor Department said, more than the 240,000 forecast by economists. The unemployment rate ticked down to a six-and-a-half year low 5.6% from 5.8% in November. Economists had forecast a decline to 5.7%.
But the report showed that average earnings fell by 0.2% in December, missing expectations for a 0.2% increase and were up by only 1.7% from a year earlier.
The drop in average earnings prompted investors to take profits in the dollar, as markets pushed back expectations for the first hike in U.S. interest rates to late-2015 from mid-2015 before the report.
Following an initial drop the euro gained ground against the dollar, with EUR/USD up 0.42% to 1.1841 in late trade, recovering from Thursday’s nine-year trough of 1.1753. The pair still ended the week down 0.88%, its fourth straight weekly decline.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.39% to 92.18 late Friday, off the 12-year peaks of 92.76 reached in the previous session. The index still notched up a weekly gain, supported by weakness in the common currency.
In the euro zone, data on Friday showed that industrial output fell in both Germany and France in November, while German exports also fell. The weak data fuelled speculation that the European Central Bank will embark on full blown quantitative easing as soon as its next meeting on January 22.
Earlier in the week, data showed that consumer prices in the euro area fell in December for the first time in more than five years, adding to pressure on the ECB to step up measures to avert the threat of deflation taking hold in the region.
The single currency was also pressured lower by uncertainty over Greece’s future in the euro zone if far-left anti-austerity party Syriza win elections due to be held later this month.
In the week ahead, the economic calendar is light, but markets will be looking ahead to Wednesday’s report on U.S. retail sales, as well as Friday’s data on U.S. consumer sentiment and factory output. The euro zone is to report on industrial output on Wednesday.
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Banks prepare plans for Greek eurozone exit
Banks and other financial institutions in Europe are stress-testing their internal systems and dusting off two-year-old contingency plans for the possibility Greece could leave the region’s monetary union after a key election later this month.
Among the firms running through drills are Citigroup Inc. C, -2.23% Goldman Sachs Group Inc. GS, -1.53% and brokerage ICAP PLC IAP, +0.20% according to people familiar with the matter.
The firms’ plans include detailed checks on counterparties that could be significantly affected by a Greek exit, looking at credit exposures and testing how they would provide cross-border funding to local operations.
Some firms are also preparing for the impact on payment systems and conducting trial runs of currency-trading platforms to see how they would cope with adding a new Greek currency or dealing with potential capital controls.
The moves come as Greek leftist opposition party Syriza continues to lead in recent public opinion polls ahead of national elections on Jan. 25. The ruling coalition government has framed the election as a de facto poll on whether the country stays in the eurozone, saying Syriza’s antiausterity policies would force a break with eurozone partners. Syriza, though, hasn’t campaigned on an exit and most Greek voters want to stay in the monetary union, according to recent polls.
Most analysts still say the chances of a Greek exit are quite low. Economists at Commerzbank rate the chances on an exit at below 25%.
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The EURUSD initially broke down below the 1.18 level during Friday’s session, but found enough buyers to turn things back around and close near the high of the day. Now the million dollar question will this bullish correction turn into a trend change, or will we see another break below 1.1750?