EUR/USD Sep. 5 – Licking its wounds after Draghi, ahead

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EUR/USD is licking its wounds on low ground, just under 1.2950. The ECB’s one-two punch hit the pair hard, and the strong US data didn’t help, to say the least. While the markets are still digesting Draghi, we have the all-important US Non-Farm Payrolls to ensure some more action.

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: 1.2920 to 1.2955.

Further levels in both directions:

EURUSD Seotember 5 2014 technical analysis fundamental outlook sentiment after ECB before NFP

  • Below: 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

  • 00:15 FOMC member Richard Fisher talked. It was hawkish, no surprises.
  • 1:00 FOMC member Narayana Kocherlakota talked. It was dovish, no surprises.
  • 6:00 German Industrial Production. Exp. +0.5%, actual 1.9%.
  • 9:00 Euro-zone Revised GDP. Exp. 0%.
  • 12:30 US Non-Farm Payrolls. Exp. +230K .See how to trade the NFP with EUR/USD.
  • 12:30 US unemployment rate. Exp. 6.1%.
  • 12:30 US participation rate. Exp. 62.9%.
  • 12:30 US Average Hourly Earnings. Exp. +0.2% m/m.

*All times are GMT.

For more events and lines, see the Euro to dollar forecast.

EUR/USD Sentiment

  • 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.
  • Some optimism towards the NFP: The king of forex was somewhat overshadowed by the ECB, but the last hint towards the jobs data was positive and sent EUR/USD even lower. The ISM Non-Manufacturing PMI came out at 59.6 points, the highest in 9 years. Also the employment component is at a multi-year high. On the other hand, the ADP NFP fell short with 204K instead of 218K expected. See how to trade the NFP with EUR/USD.
  • Peace talks in Minsk: The breaking news about a permanent ceasefire came out of Kiev and were followed by a denial from Moscow. While the presidents talked, nothing is really changing on the ground. Analysis: 5 Reasons to fade the Ukraine-Russia ceasefireHowever, later on Russian president Vladimir Putin laid out a 7 point peace plan, that will be on the table in a meeting between him and Ukrainian president Poroshenko today. Is it the beginning of the end to the conflict or just a temporary pause?

In our latest podcast, we run down the huge ECB decision among other topics.

Download it directly here.

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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