Eur/usd - page 338
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The single currency registered an increase on Thursday. After a volatile session the euro added 39 pips at a closing price of 1.1275. Extreme values for the day were reached respectively at 1.1234 and 1.1325. if the neutral trend of the past two weeks continues, it is possible to test the first support at 1.118.
Yesterday the EURUSD rose with a wide range making a new short-term high but failed to sustain the momentum and closed at the middle of the daily range.
The currency managed to close above the symmetrical triangle on the daily time-frame plus suggesting that the range bound is over and a new trend is developing.
The key levels to watch are 1.1460 (Resistance), 1.1237 (support) and 1.1097 (support).
EUR: More ECB Action On The Horizon; How To Position? - Credit Suisse
"The probability of more ECB easing appears to be on the rise given the recent weakness in macro data, including persistently low inflation, the appreciation of the euro, and the rise in outside risks affecting the euro area outlook.
Our rates strategists believe that recent announcements regarding the PSPP by the ECB are not just a response to the lack of liquidity, but likely also a sign the ECB is preparing the ground for a possible extension or acceleration of its programme.
A new round of QE trades. While some signs of the market pricing in QE extension have started to appear, most notably in the sovereign bond market, the euro remains substantially stronger compared to its lows earlier in the year - something that the ECB Governing Council evidently hasn’t failed to notice, as discussed above. And European risky assets have shown signs of recovery, but are clearly off their highs following the Q3 risk sell-off, and would stand to offer significant upside if they were to trade back towards the levels seen shortly after the start of ECB asset purchases.
For investors willing to engage in a new round of QE trades at this stage, we find that selling upside in EURUSD via options offers attractive risk/reward: as our FX Strategists highlight, there is good reason to be suspicious of the euro’s capacity to sustain a rally, as the ECB seems likely to keep jawboning it below the 1.15 level given the disinflationary powers still evident in the euro area.
The proceeds from the sale of EURUSD calls can be used to finance upside either on Bunds, or on European risky assets. Through such structures, investors would risk losing money only in a scenario of further euro appreciation, which is exactly what we expect the ECB to try and counteract. And if such losses were to occur, some could be offset by gains on the other leg of the structure (if Bunds, or respectively risky assets, were to rally at the same time)."
Sean Shepley, Bill Papadakis, Honglin Jiang - Credit Suisse
EUR/USD: Pair Hits 3-Week High On Broad Dollar Weakness
The US dollar was trading broadly lower (yen excluded) on Friday, and the pair was seen well above the $1.13 handle again, with further upside potential possible in the coming days.
The EUR/USD currency pair advanced 0.78% to $1.1363, the levels last seen on September 18.
In the previous session, the Federal Open Market Committee minutes were published and were rather dovish, driving the greenback lower, but losses were only limited. Moreover, stocks gained sharply and gold dropped, suggesting a somewhat mixed reaction.
"The overall tone of the September FOMC minutes was dovish and it was seen as “prudent to wait for additional information” before acting. In particular, the report reinforced the post-meeting interpretation by the market that unfolding events overseas and the potential for the fallout from the strong dollar have stayed the Fed’s hands on raising rates. Some members noted that the downside risks to the outlook for both growth and inflation has increased," Millan L. B. Mulraine, deputy chief US macro strategist at TD Securities USA wrote.
As there are no major macro news on the agenda today, volatility is expected to be lower and investors will likely digest yesterday's minutes, causing a risk-on approach, which should prefer the dollar to the euro.
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EUR/USD Outlook: Euro Poised to Test $1.15
The pair was seen rising in the previous days and it managed to close the previous week above $1.13 as traders have been exiting long US dollar positions amid a dovish Federal Open Market Committee (FOMC) minutes.
On Thursday, dovish FOMC minutes were published, which sparked a global US dollar sell off, which continued on Friday.
"There was no clear signal in the minutes that the Fed was close to raising rates in September as suggested since by some FOMC members. After the disappointing payrolls report the likelihood of the first rate hike being delivered this year has diminished although it can’t yet be fully ruled out," analysts at Bank of Tokyo-Mitsubishi wrote on Friday.
The US dollar will likely depreciate in the near term as US fundamentals have deteriorated in the previous days, pointing to some broader weakness in the US economy, which might deter the Fed from raising rates this year.
Futures on Fed funds already don't indicate any action this year and according to the latest odds, the Fed should hike rates in March, which is a huge delay from September, when it had been previously expected.
On the other hand, there are no clear hints that the European Central Bank will increase the QE amount in the near future, which might provide some support for the euro.
Therefore, the pair is expected to breach the $1.14 resistance in the next week, with a possible test of the psychological level of $1.15. From the US dollar point of view, retail sales and CPI are due, but both are expected to weaken from the previous figures, which might undermine the greenback further.
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Bullish on this pair!
Bullish on this pair!
For the next 3-400 pips for sure
EUR/USD after the news of the FOMC broke 1.1300 and now heading for 1.1370 next level 1.1400 then 1.1450. It is better to close my positions and wait for the price over the break of the resistance level.
EUR/ USD forecast for the week of October 12, 2015
The EUR/USD pair initially dipped during the course of the week, but then turned back around to form a relatively positive candle. However, the resistance at the 1.15 level above still looms large, and therefore we feel that we are essentially caught in an ascending triangle. Once we get above the 1.15 level, it is time to start buying. In the meantime though, it’s hard to imagine long-term traders getting involved beyond those who are willing to use this as a potential investment. On the other hand, if we break down below the uptrend line that we have marked on the chart that could be a selling opportunity.
EUR/USD: Euro Jumps Over Week, Nears $1.14
- Volatility was not very high during the week, with major movements starting on Thursday and Friday, which brought the pair above the $1.13 mark, ending the week 1.31% higher at $1.1358, possibly attacking the $1.14 resistance next week.
On Monday, the French services PMI for September improved from 50.6 to 51.9, while the German gauge dropped to 54.1 from 54.9 previously. The PMI for the whole euro zone eased to 53.7 and the composite index decreased to 53.6.
The more important US ISM non-manufacturing index dropped to 56.9 points and the three-month low in September, missing the forecast of 58.0 points. Market reaction was only mild on Monday.
Tuesday brought only the US trade balance, which deteriorated sharply in August, when the deficit widened from $41.8 billion to $48.3 billion. This negative result will likely cause a downward revision for Q3 GDP.
Fundamentals continued on Wednesday. Industrial output in Germany posted a 1.2% fall in the reported period, seasonally adjusted, after reporting a revised 1.2% growth in the preceding month, according to Destatis. Analysts had expected a 0.2% gain.
On Thursday, US initial jobless claims improved from 276,000 to 263,000, while continuing claims slightly worsened to 2,204K from 2,195K previously, but there was no volatile reaction from the US dollar.
Meanwhile, the European Central Bank also published minutes from its meeting in September, showing the willingness of central bank officials to stick to the ongoing massive bond-buying program.
Later in the day, dovish Federal Open Market Committee minutes were published, which sparked a global US dollar sell-off, which continued on Friday.
As the final day of the week did not bring any major releases, the pair remained bid for the rest of the day and finished both Friday and the week higher.