ECB PLANS TO KEEP INTEREST RATES UNCHANGED FOR SOME TIME
The EUR/USD quotes fell sharply following the ECB’s decision to maintain the asset purchasing program until September 2018 but will halve it to 30 billion euro of monthly purchases from January. At the same time Mario Draghi noted that interest rates will not be changed for a long time and will be increased only after the end of the asset purchasing program. These announcements along with the possibility of an interest rate hike in the US this year may see the price of the euro-dollar fall to 1.1500 or lower. Investors’ activity today is restrained as they wait for tomorrow’s release of GDP data in the US which is likely to lead to significant moves.
The single currency experienced some pressure at the beginning of the trading session from the news on the decline of the German Gfk Consumer climate index to 10.7 in November which is 0.1 below the forecasted figure. On a positive note for the euro, the unemployment rate in Spain fell to 16.4 in the second quarter which is 0.2% better than forecasted and 0.8% less than in the previous period.
The NZD/USD price continued to move within the descending channel after disappointing news on the trade balance in New Zealand. The trade deficit for September grew to $1143 million against the $900 million forecasted.
The USD/JPY resumed positive dynamics on the background of the US dollar strengthening. Volatility levels are likely to remain high due to the expected releases of Japan’s consumer price index at 23:30 GMT and the US Gross Domestic Product tomorrow at 12:30 GMT.
The EUR/USD quotes demonstrated a sharp descending move after ECB President Mario Draghi’s statement. As a result, the quotes approached a strong support line at 1.1730, and breaking through it may become a trigger for the bears to pull the price down to 1.1620 or even to 1.1550. The RSI on the 15-minute chart is in the oversold zone, which points to a possible price rebound within the correction.
The USD/JPY price rebounded from the inclined support line and continued to move along it. Gaining a foothold above the 1.1400 mark may become a firm basis for further price growth to 114.70 and 115.00. On the other hand, breaking through the angled support may result in a further fall to 113.00. Volatility is likely to remain high until the end of the week.
The NZD/USD was able to fix below the 0.6890 and continued the descending movement within the limits of the channel. The immediate target in case of maintaining the current impulse will be at 0.6825. It’s less likely that the trend will change to positive and the basis for it doing so may come from fixing above the upper limit of the descending channel and 0.7000 mark.