EUR/USD trying to find a new balance on lower ground around 1.2870, after it surrendered to the greenback’s strength following Yellen’s comments and dipping into a new 14 month low. There’s no rest for the comment currency, as today we get the results of the first TLTRO – the targeted loans from the ECB. It’s also important to follow the news from Scotland – it has an impact on the euro-zone as well.
Here’s a quick update on technicals, fundamentals and sentiment moving the pair.
- Asian session: The pair managed to claw its way back up above the previous low of 1.2860..
- Current range: 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
- 7:30 Swiss rate decision – could impact the EUR/CHF floor.
- 9:15 TLTRO results. Exp. ~150 billion euros.
- 12:30 US jobless claims. Exp. 312K.
- 12:30 US building permits. Exp. 1.04 million.
- 12:30 US housing starts. Exp. 1.04 million.
- 12:45 Fed Chair Janet Yellen talks.
- 14:00 US Philly Fed Manufacturing Index. Exp. 22.8 points. See how to trade the figure with USDJPY.
* All times are GMT.
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- Fed-fest: 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. IT is currently trying to recover.
- TLTRO results:The first round of targeted cheap loans which are expected to reach the real economy is on the move, and results will be announced today. As it is the first round, we are expecting a cautious take up of less than 200 billion euros. A big take up means that there is more money in the euro-zone, devaluing the euro, but a lower chance of full blown QE. We could see a choppy reaction in markets.
- Scottish referendum: The big day has come for the fate of the UK. Here is the timetable for the elections where you can find links to all the latest news. This also has an impact on the euro, where a breakup of the UK could hit the euro as well.
- Better inflation numbers: ECB president Mario Draghi can put half a smile on his face, with August’s final headline inflation numbers standing at 0.4%, better than earlier reported. The lower value of the euro may have begun contributing to higher inflation.
- Bold call for EUR/USD parity: An analyst sees euro/dollar on a downward trajectory and envisions a slide all the way down to parity. There are good reasons, and parallels to the 90s.
More: EUR/USD could resume downtrend soon – Elliott Wave Analysis
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