EUR/USD is trading in the new low range, unable to recover from Draghi’s big blows. A weak Non-Farm Payrolls figure on Friday in the US, and a ceasefire in the Ukraine that is seemingly holding on for now, do not encourage the common currency.  A light calendar today keeps the focus on sentiment as the Scottish independence polls put the focus on the falling pound.
Here’s a quick update on technicals, fundamentals and sentiment moving the pair.
- Asian session: The pair traded between the new low of 1.2920 and the 1.2955 resistance line.
- Current range:Â 1.2920 to 1.2955.
Further levels in both directions:
- Below:Â 1.2920, 1.2840, 1.28 and 1.2750.
- Above: 1.2955, 1.30, 1.3050, 1.31 and 1.3175.
- The new low of 1.2920 is minor support on the way to 1.2840.
EUR/USD Fundamentals
- 6:00 German Trade Balance. Exp. 17.3 billion, actual 22.2 billion.
- 8:30 Euro-zone Sentix Investor Confidence. Exp. 3.2 points.
- 12:45 US Treasury Secretary Jack Lew talks.
- 19:00 US Consumer Credit. Exp. 17.4 billion.
* All times are GMT.
For more events and lines, see the EUR/USDEUR/USDEUR/USDEUR/USDEUR/USD.
EUR/USD Sentiment
- Weak Non-Farm Payrolls: After quite a strong week of top-tier US data, the “king of forex†disappointed with a gain of only 142K jobs. Further disappointments came from a lower participation rate and a slow rise in wages. It gave some currencies a chance to recover against the dollar, but the euro only temporarily bounced.
- The full Draghi show: The ECB first surprised by cutting the interest rate deeper: 0.05% for the lending rate and -0.20% for the deposit rate. It was surprising given that the deposit rate was already negative. And then came Draghi, announcing the ABS program. Details are expected in October but he made it clear that it will have a “sizable†impact on the balance sheet. This already sent the pair to bounce off 1.30. It continued deteriorating from there – over 200 pips in one day, a treat unseen in a long time. Here is the full coverage of the ECB. The steps are still weighing heavily on the euro.
- Ceasefire in Ukraine: Finally some change on the ground: a ceasefire agreed upon on Friday is being occasionally violated, but in general it is still on. There is suspicion on all sides, so new sanctions are still on the cards. The breaking news about a permanent ceasefire came out of Kiev and were followed by a denial from Moscow.
In our latest podcast, we run down the huge ECB decision among other topics.
Download it directly here.
