EUR/USDÂ is ticking lower below resistance at 1.2920, sliding after the counter reaction to the FOMC dollar rally. Scotland voted against independence and this is also a sign of relief for Europe. The focus now returns to monetary policy divergence between the euro-zone and the US.
Here’s a quick update on technicals, fundamentals and sentiment moving the pair.
- Asian session: The pair traded steadily under 1.2920..
- Current range:Â 1.2860 to 1.2920
Further levels in both directions:
- Below: 1.2860, 1.2835, 1.28 and 1.2750.
- Above: 1.2920, 1.2960, 1.30 and 1.3050
- We are now one range lower, and there is room for more falls.
EUR/USD Fundamentals
- 6:00Â German PPI. Exp. -0.1%. Actual -0.1%.
- 8:00 Euro-zone Current Account. Exp. 14.3 billion.
- 14:00 USÂ CB Leading Index. Exp. +0.4%.
* All times are GMT.
For more events and lines, see the EUR/USD.
EUR/USD Sentiment
- Scotland says No: At a margin of around 55% against 45%, the Scots rejected independence. This had an impact on the pound, but also provides a sigh of relief for the euro-zone, as the UK is a trade partner and independence for Scotland could have stirred other separatist movements, most notably in Catalonia.
- Weak TLTRO results:The first round of targeted cheap loans which are expected to reach the real economy had a poor outcome of only 82.6 billion euros. Banks are not so eager to lend, even cheap money. This raises the chances of further monetary stimulus from the ECB, and weighs on the euro.
- Mixed US data: Jobless claims dropped sharply to 280K, around the multi-year lows. However, the volatile housing starts and building permits disappointed.
- Fed-fest and take profit: The Fed did not remove the critical word “considerable†regarding the timing of the first rate hike and still said there is under utilization in the labor market. The moves to the hawkish side were very subtle: two hawkish dissenters, more members seeing a hike in 2015 and an explicit declaration that QE ends in October. Nothing was big news, but the markets seem hungry for dollars and EUR/USD fell to a new 14 month low at 1.2834. The pair then recovered and rang back up to 1.2920.
More: EUR/USD could resume downtrend soon – Elliott Wave Analysis
