Mr. Euro was slammed lower on the forex dance floor against all his dancing partners after the European Central Bank announced a 10 basis point cut to the main rate to 0.05%, as well as a cut in the deposit rate to -0.20%.
The Bank of England how ever kept rates unchanged this morning.
Ceasefire Chatter
On global geopolitical news, it was reported yesterday morning on news wires that Putin and Poroshenko had reached a permanent ceasefire agreement in Eastern Ukraine. The news sent European equities higher, bonds lower and gave the Euro a good deal of support. A little later on spokesman from the Kremlin came on the news wires saying there could not be a ceasefire between Ukraine and Russia because Russia is not any part of the Ukraine conflict! Markets corrected some of their earlier optimism, but did keep hold of some hope and equities did close the day higher.
Meanwhile France has paused the delivery of its first of two warships headed for Russia. They were keen to say that it is not a cancellation of the contract, as that’s got a billion euro penalty clause, but it was a stronger signal than the ones we’ve been hearing from Europe lately.
Overnight we’ve seen Asian markets move lower as they take risk off the table ahead of the announcement. This came despite a robust Beige Book from the US Federal Reserve, which showed growth across all 12 Federal Reserve districts over the summer.
Intraday Forex Technical Levels
EUR/USD 4-hour: Downside prevails.
Invest Diva likes: Short positions below 1.3000 with targets at 1.2950 and 1.2900 in extension.
If pair goes nuts: Above 1.3112 look for further upside with 1.3219 and 1.3295 as targets.
What’s up on the forex dance floor: The pair was slammed down reaching all our previous bearish targets and below. The sentiment seems to still be on the bearish side however we could expect an exhaustion of the down moves and see a rebound soon
Supports and resistances:
1.3295
1.3219
1.3112 pivot point
1.2950
1.2900
GBP/USD 4-hour: Moving down.
Invest Diva Likes: Short positions below 1.6445 with targets at 1.6320 and 1.6257.
If Pair Goes Nuts: Above 1.6445 look for further upside towards 1.6535 and 1.6566.
What’s up on the Forex Dance Floor: The pair is on an overall downtrend below the Ichimoku cloud and continues moving down. The RSI has reached the oversold zone but seems to be continuing further down.
Supports and Resistances
1.6566
1.6535
1.6445 Pivot point
1.6320
1.6257
USD/JPY 4-hour: Forming a Double Top
Invest Diva Likes: Long positions above 105.00 with targets at 105.16 and 105.37 in extension.
If Pair Goes Nuts: Below 105.00 look for further downside towards 104.79 and 104.25.
What’s up on the Forex Dance Floor: The pair is on an overall uptrend. Itrebounded down after reaching a previous top at 105.160, moving a bit down to the middle of Bollinger Band and now moving up again. Could be forming a Double Top pattern so we shall wait and see. The RSI is heading to the overbought zone.
Supports and Resistances
105.50
105.37
105.00 Pivot point
104.79
104.25
AUD/USD 4-hour: Testing resistance
Invest Diva Likes: Long positions above 0.9355 with targets at 0.9386 and 0.9414 in extension.
If Pair Goes Nuts: Below 0.9355 look for further downside towards 0.9336 and 0.9303.
What’s up on the Forex Dance Floor: The pair has broken above the Ichimoku’s cloud and testing a resistance level at 0.9368 for the 3rd time in the past month. A break above it could open doors for more gains.
Supports and Resistances
0.9414
0.9386
0.9355 Pivot point
0.9336
0.9303
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