Eur/usd - page 268
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EUR/USD continued to break the support lines. I went short under 1.1300. now price is facing the support level 1.1150 breaking and closing under will open another opportunity for another short.
USD formed correction against the EUR, directing the price to the support at 1.1270. When crossing this level, we can expect a drop to important level around 89-day moving average located at the psychological level at 1.1000. Breaking below this level will test the validity of the formed by mid-April upward movement in favor of the euro.
Level 1.100--1.150 was a strong support
We shall see this time
German Producer Price Inflation 0.1% vs. 0.2% forecast
Germany’s producer price index rose less-than-expected last month, official data showed on Wednesday.
In a report, Destatis said that German Producer Price Inflation rose to a seasonally adjusted annual rate of 0.1%, from 0.1% in the preceding month.
Analysts had expected German Producer Price Inflation to rise 0.2% last month.
On yesterday session the EURUSD fell fast and hard after ECB statement saying that due to seasonal factors QE will be front loaded to May and June, hypothetically deposit rates could even be more negative. The currency closed near the low of the day with a wide spread day, the next support levels to watch are 1.1097 daily support, 1.1058 Fibonacci level (38.2) and 1.0972 the 50 day moving average.
EUR/USD: Euro Hovers Around $1.11, Strong Dollar in Control
The euro remained heavy on Wednesday ahead of the opening bell, trading more than 200 pips lower icompared to Tuesday morning.
The buck strengthened again on Tuesday following much stronger than expected housing starts data for April, with the Federal Open Market Committee (FOMC) minutes released later today expected to provide further power for dollar bulls.
The euro fell from above $1.13 levels to a fresh weekly low of $1.1120 this morning. After the European open, EUR/USD was seen 0.40% lower at $1.1101.
Europe's common currency plunged on Tuesday following comments from European Central Bank (ECB) member Benoit Coeure, who said that the central bank is set to frontload QE purchases in May and June. The reaction was very heavy and the pair dropped around 140 pips from intraday highs around $1.1320 to $1.1175.
Coeure's comments suggest that European policymakers are concerned about the recent rebound in the euro at a time when US economic data is starting to tail off, which is bringing forth downward pressure on the US dollar.
"It seems that while the ECB claims that the exchange rate isn’t a policy target, the jump in yields, as a result of the recent bond sell-off has prompted some concern that therebound in the euro could well hinder the progress made in putting a floor under falling prices," Michael Hewson from CMC Markets UK wrote on Wednesday.
Later in the US session all eyes will be on the Federal Open Market Committee minutes, which are expected to provide further power for dollar bulls. Chicago Fed chief Charles Evans will hold a speech ahead of the release. "Any change of opinion from him after the housing numbers would be notable given how dovish he was on Monday," Rabobank wrote on Wednesday.
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Eurozone Construction Output Rebounds In March
Eurozone construction output increased in March, after declining in the previous month, data from Eurostat showed Wednesday.
Construction output rose 0.8 percent month-over-month in March, reversing a 1.6 percent decrease in February, which was revised from a 1.8 percent drop reported earlier.
Within construction, civil engineering output grew 3.2 percent in March, in contrast to 2.2 percent drop in the preceding month. Output in the building sector also registered an increase of 0.3 percent in March after falling 1.4 percent in February.
On an annual basis, construction output fell at a slower pace of 2.7 percent in March, following a 3.5 percent drop in the preceding month, revised from a 3.7 percent decline. It was the second month of decrease in a row.
In the EU28, construction output expanded 1.8 percent monthly and dipped 1.3 percent yearly in March.
Among member states, the highest monthly increases in production in construction were observed in Hungary, Romania and the United Kingdom, while biggest decreases were logged in Spain and Bulgaria.
EUR/USD continue to move lower yesterday, bottomed at 1.1118. The outlook remains bearish in nearest term. Important support is seen around 1.1100 - 1.1040, as break and daily close below it could become an early signal of bearish reversal scenario. Initial resistance is at 1.1200. A clear break above that area could lead price to neutral zone and give another chance to the bullish outlook testing 1.1280. The trend is not over until it's over, so as long as the pair remains in the bullish channel the bullish outlook should remain valid.
EUR/USD successfully closed under the support line 1.1150 yesterday. today price fell around 100 pips but now price is trading in side ways I don't think there is an opening for another position at the moment.
EUR Rates Hit Fresh Lows Below Zero – RBS
EUR/USD managed to somewhat stabilize after the big falls, but we have to note the background; an ongoing drop in rates, and now below zero.
The team at RBS sheds some light on this phenomenon:
Here is their view :
Cash rates in the Eurozone have continued to sink below zero to new record lows; 3mth OIS is at -12bp, notes RBS.
“Much has been made of the ECB Council Member Benoit Coeure’s speech at a hedge fund gathering on Monday, released to the public on Tuesday. The focus was on his comment that the ECB intends to front load bond purchases this month and next to compensate for less liquid summer markets. But the crux of his speech was about how the theoretical zero bound for cash rates is actually substantially below zero and policy can crush rates across the curve lower to achieve more policy easing if required,” RBS adds.
“Indeed cash rates in the EUR are settling below zero across the front of the curve. As we have contended for some time this policy is likely to make the EUR very cheap, driving cash out of EUR into other currencies,” RBS argues.