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2013-07-04 03:15 GMT
EUR - Beware of the ECB
Since the last ECB meeting, we have seen more improvements than deterioration in the Eurozone economy. In Germany specifically, consumer spending has been healthy, unemployment rolls have declined, leading to an improvement in business and investor confidence. However the strength was not without areas of weakness. Businesses and investors grew more optimistic about future economic activity but more grim about current activity. Considering that the current performance of the economy is what really matters, the ECB may look beyond everyone's hope for improvement. Also stronger service sector activity in the region's largest economy was offset by a deeper contraction in manufacturing. So as you can see the recovery in the Eurozone is uneven and when combined with a 5% sell-off in the DAX, since the last meeting the ECB has very little to be optimistic about.
Furthermore, a political crisis has hit Portugal, putting the region at risk of greater uncertainty and turmoil. The crisis was kicked off by the resignation of the leader of the junior party. If a grand coalition cannot be formed, the government may be forced to hold early elections, which would be negative for the euro because it would mean the collapse of the current government. This political uncertainty combined with mixed Eurozone data and the recent volatility in the financial markets leads us to believe that ECB President Draghi will retain an open mind on non-standard monetary policy measures including negative deposit rates and remind investors that they are in a very different position from the Federal Reserve and as such will keep rates low for as long as necessary. In a nutshell, we don't think Draghi will have anything kind to say for the euro and if his level of dovishness increases, it could drive the currency pair to 1.29. In the off chance that he surprises with optimism, 1.30 could become a bottom for EUR/USD. -FXstreet.com
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2013-07-04 08:00 GMT
EMU. Gross Domestic Product s.a. (YoY)
2013-07-04 11:00 GMT
UK. BoE Interest Rate Decision
2013-07-04 11:45 GMT
EMU. ECB Interest Rate Decision
2013-07-04 12:30 GMT
EMU. ECB Monetary policy statement and press conference
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2013-07-04 05:22 GMT
EUR/USD lingers at 1.30, awaits the ECB
2013-07-04 04:59 GMT
NZD/USD flat for the session unable to overcome the 0.78 handle
2013-07-04 04:17 GMT
GBP/USD retraces into 1.5250 post bullish engulfing day
2013-07-04 03:23 GMT
AUD/USD jumps on RBA Lowe's comments
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EURUSD
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HIGH
1.30233
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LOW
1.29875
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BID
1.29937
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ASK
1.29943
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CHANGE
-0.12%
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TIME
08:23:05
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OUTLOOK SUMMARY
Up
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TREND CONDITION
Upward
penetration
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TRADERS SENTIMENT
Bearish
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IMPLIED VOLATILITY
High
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MARKET ANALYSIS - Intraday Analysis
Upwards scenario: Appreciation above the resistance at 1.3015 (R1) might commence new step of the ascending structure. Our intraday targets today are placed at 1.3035 (R2) and 1.3053 (R3).
Downwards scenario: Risk of the downtrend development is seen below the support level at 1.2984 (S1). Weakening below this mark might clear the way towards to immediate supports at 1.2965 (S2) and 1.2945 (S3). ECB interest rate announcement is a key factor today.
Resistance Levels: 1.3015, 1.3035, 1.3053
Support Levels: 1.2984, 1.2965, 1.2945
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GBPUSD
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HIGH
1.52831
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LOW
1.52513
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BID
1.52575
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ASK
1.52583
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CHANGE
-0.13%
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TIME
08:23:06
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OUTLOOK SUMMARY
Up
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TREND CONDITION
Upward
penetration
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TRADERS SENTIMENT
Bearish
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IMPLIED VOLATILITY
High
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Upwards scenario: Market remains relatively stable prior BOE interest rate decision, though clearance of next resistance level at 1.5293 (R1) might initiates bullish pressure. Above the local high locates our resistive means at 1.5316 (R2) and 1.5341 (R3).
Downwards scenario: On the downside our focus is shifted to the next support level at 1.5238 (S1). Loss here is required to push the price towards to our next interim targets at 1.5213 (S2) en route towards to final support at 1.5186 (S3)
Resistance Levels: 1.5293, 1.5316, 1.5341
Support Levels: 1.5238, 1.5213, 1.5186
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USDJPY
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HIGH
100.091
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LOW
99.692
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BID
99.847
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ASK
99.849
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CHANGE
-0.04%
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TIME
08:23:07
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OUTLOOK SUMMARY
Down
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TREND CONDITION
Upward
penetration
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TRADERS SENTIMENT
Bullish
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IMPLIED VOLATILITY
Medium
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Upwards scenario: Possibility of price progress is seen above the next resistance level at 100.15 (R1). Breakthrough here would suggest our interim target at 100.42 (R2) and then mark at 100.70 (R3) acts as last resistive measure for today.
Downwards scenario: Negative developments might be settled below the important support level at 99.63 (S1). Any price action below it would then be targeting support at 99.36 (S2) and final target could be exposed at 99.09 (S3) mark.
Resistance Levels: 100.15, 100.42, 100.70
Support Levels: 99.63, 99.36, 99.09
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