Single currency slumps as the ECB cuts 2019 growth prospects
The euro currency came under heavy selling pressure against the US dollar this week as the European Central Bank downgraded its economic projections for 2019. The ECB lowered its forward guidance, catching market participants off-guard and sending the EURUSD pair under the key 1.1300 level. ECB President Mario Draghi reiterated that inflation remains muted, while protectionism and global risks continue to cause headwinds for Europe’s economy. The ECB policy statement also communicated to investors that economic data points from core European nations remained weak.
- The EURUSD pair is strongly bearish while trading below the 1.1275 level, key support is found at the 1.1200 and 1.1180 levels.
- If the EURUSD pair trades above the 1.1275 level, key resistance is found at the 1.1337 and 1.1360 levels.
Bank of Canada turn bearish
The Bank of Canada maintained interest rates at 1.75 percent this week and turned significantly more bearish on the Canadian economy. The Canadian dollar fell broadly, as the Bank of Canada policy statement showed a bearish shift, with Canadian policymakers talking down growth expectations and future rate increases this year. Central bank Governor Stephen Poloz noted that the current downturn in the Canadian economy could last well into the first half of 2019. The Canadian dollar tumbled against the US dollar after the policy statement was released, with the USD/CAD pair advancing towards the important 1.3500 resistance level.
- The USDCAD pair is bullish while trading above the 1.3300 level, key resistance is found at the 1.3500 and 1.3660 levels.
- If the USDCAD pair trades below the 1.3300 level, sellers may test towards the 1.3260 and 1.3200 support levels.
Litecoin bulls return
Litecoin continued to outperform the broader cryptocurrency market this week, with the fifth largest cryptocurrency by market capitalization advancing towards levels not seen since October 2018. The LTCUSD pair posted double-digit gains after finding strong technical support from its trend defining two-hundred day moving average. Bitcoin and Ethereum came under early week selling pressure, with both cryptocurrencies managing to defend key weekly technical support. Bitcoin bulls continue to search for an elusive technical breakout above the $4,000 resistance level.
- The LTCUSD pair is bullish while trading above the $39.00 level, key resistance is found at the $54.00 and $65.00 levels.
- If the LTCUSD pair trades below the $45.00 level, sellers may test towards the $39.00 and $36.00 levels.
RBA on hold
The Australian dollar edged closer to the 0.7000 level against the greenback this week as the Reserve Bank of Australia kept rates unchanged as widely expected. The RBA reiterated that lower interest rates are needed to support the Australian economy and noted that domestic inflationary pressure remains subdued. The RBA also said that Australian household debt and trade tensions between the United States and China are key risks to the Australian economy. China and the United States are Australia’s two largest trading partners, with the New Zealand economy in third place.
- The AUDUSD pair is bearish while trading below the 0.7130 level, key support is found at the 0.7000 and 0.6930 levels.
- If the AUDUSD pair advances above the 0.7130 level, buyers may test towards the 0.7180 and 0.7230 resistance levels.