Monday, June 9, 2014
We saw another round of Euro selling post the ECB announcement from last week. Some of this pressure on EUR/USD could be a combination of lingering reactions to the dovish position of the ECB to provide stimulus, as well as the overall thin liquidity due to Whit Monday. During today's trading session, the EUR/USD fell 87 pips from the session high at 1.3669 to the session low at 1.3582. In today’s technical analysis video, we will describe price action in EUR/USD and identify common areas of support & resistance for trade entry.
Thursday, June 5, 2014
During today's trading session, the much anticipated ECB Policy Announcement created volatile trading for Euro Crosses, as investors continued to interpret the outcome of the new ECB accomodative measures.
The ECB cut rates by 10bps in both the refi and deposit rate, causing the later to be in negative territory to -0.10%. They also announced Targeted LTROs in the amount of EUR400 Billion and unsterilized purchases in the SMP that would counter the deflationary concerns and help to stimulate growth in the Eurozone economy.
The ECB's decision to add stimulus is a very supportive move for European financial assets like equities and peripheral bonds (Spanish 10-year government yield at +2.60% and below its US equivalent for first time in four-years). Mario Draghi's decision to "do whatever it takes" encouraged portfolio investment into Euro Region, and this will always be euro-supportive. After the ECB revealed the new measures, the EUR/USD initially fell to support at 1.3503, and later rebounded to 1,3670 in a 167 pip range.