Sunday, April 24, 2016

EUR finding traction after outside day Friday? - FXStreet

Valeria Bednarik[1], chief analyst at FXStreet noted that the dollar closed the week with a firm tone against most of its major rivals, mostly weighed by the non-event that was the ECB meeting.

Key Quotes:

"The European Central Bank failed to provide fresh stimulus, whilst the press conference was dedicated to maintain confidence in the ECB ongoing easing policy.

The comments came as a response to German's criticism, as policymakers in the country have clearly expressed concerns over the fact that "monetary policy has been the only policy in the last four years to support growth" and is clearly not working, given that inf lation, according to Mario Draghi, will likely fall back into negative territory during the upcoming months, meaning that achieving the 2% target will take more time.

Additionally, the common currency suffered on Friday with the release of the Eurozone PMIs for April, showing a modest growth, with the manufacturing sector still lagging and most of the positive news coming from services output.

The EUR/USD pair closed the week a couple of pips above the 38.2% retracement of its latest bullish run between 1.0821 and 1.1464, and is technically poised to extend its decline as in the daily chart, the indicators maintain strong bearish slopes below their mid-lines, whilst the price has remained below a now bearish 20 SMA, around 1.1330/40, also a strong static resistance region. In the same chart, the 100 DMA heads north around 1.1100, a possible bearish target should the price extend its decline. In the 4 hours chart, the technical indicators have lost their bearish strength within oversold territory, but the price stands below all of its moving averages, indicating recoveries will likely be corrective, and opportunities to sell. "

References

  1. ^ Valeria Bednarik (www.fxstreet.com)

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