Congratulations Invest Diva followers as we nailed a whole lot more forecasts on major currency pairs. The pip making continues!
Mario Draghi (AKA Super Mario) dropped the volume bombshell yesterday on the forex market. He didn’t need to talk the Euro down as his actions spoke volumes. A cut of all three main ECB rates coupled with a potentially large asset purchase facility were the order of the day and the single European currency dropped the beat on the forex dance floor.
The ECB head also clarified that some policymakers actually wanted to see more aggressive stimulus efforts. This reveals that ECB officials are very open to the idea of implementing more stimulus measures if necessary. Given the current situation of the euro zone, it probably is just a matter of time before Draghi and his men give the go signal. We like that the message has finally got through to the ECB. We don’t, for now, like the Asset Backed Securities route as it is fraught with regulation following the global crisis and similar instruments being the catalyst. This could mean that the headline numbers that the ECB hopes to purchase could be a long way off realization. All the while Europe continues to slide further.
If yesterday’s market frenzy wasn’t enough for you, we woke up to the US Non-Farm payrolls this morning during the New York session, which came in worse than expected, dragging the US dollar down a bit against her major counterparts, but nothing comparing to the drag of the Euro.
Intraday Forex Technical Levels
EUR/USD 4-hour: Rebounding after reaching our target from yesterday
Invest Diva likes: Long positions above 1.2900 with targets at 1.3000 and 1.3050 in extension.
If pair goes nuts: Below 1.2950 look for further downside with 1.2900 and 1.2840 as targets.
What’s up on the forex dance floor: The pair is briefly rebounding from our bearish target at 1.2950. The RSI is still in the oversold zone.
Supports and resistances
1.3219
1.3112
1.2950 Pivot point
1.2900
GBP/USD 4-hour: Consolidating after reaching our target
Invest Diva Likes: Short positions below 1.6320 with targets at 1.6257 and 1.6170.
If Pair Goes Nuts: Above 1.6320 look for further upside towards 1.6445 and 1.6535.
What’s up on the Forex Dance Floor: The pair is on an overall downtrend below the Ichimoku’s cloud but after hitting our bearish target at 1.6320, the pair is consolidating just below the level. The RSI is in the oversold zone.
Supports and Resistances
1.6535
1.6445
1.6320 Pivot point
1.6257
USD/JPY 4-hour: Forming a Double Top
Invest Diva Likes: Short positions below 104.79 with targets at 104.25 and 103.92 in extension.
If Pair Goes Nuts: Above 104.79 look for further upside towards 105.00 and 105.37.
What’s up on the Forex Dance Floor: The pair is on an overall uptrend. It rebounded down after reaching the bullish target at 105.37 moving a bit down to 104.79 level. As breaking this level, it could be forming a Double Top pattern so we shall wait and see. The RSI is rebounding from the overbought zone.
Supports and Resistances
105.37
105.00
104.79 Pivot point
104.25
AUD/USD 4-hour: Rebounding after reaching target
Invest Diva Likes: Short positions below the 38% Fibonacci level at 0.9390 with targets at 0.9368 and 0.9355 in extension
If Pair Goes Nuts: Above 0.9390 look for further upside towards 0.9433..
What’s up on the Forex Dance Floor: The pair has broken above the Ichimoku’s cloud and above the 50% Fibonacci level, currently testing the 38% Fibo level.. A break above it could open doors for more gains.
Supports and Resistances
0.9433
0.9390 Pivot point
0.9368
0.9355
