Euro currency volatility as the ECB announce rate cut and QE package
The euro currency experienced extreme volatility this week as the European Central Bank cut rates and announced a new QE stimulus package. The ECB cut the eurozone interest rate for banks as widely expected and announced that they would implement the next QE stimulus package. ECB President Mario Draghi said that the package would commence at the start of November and be in place for as long as needed to ignite EU inflation and growth. The euro moved below the 1.1000 level against the US dollar following the ECB policy decision and the recovered higher after the press conference with ECB President Mario Draghi. President Draghi sounded more dovish towards the eurozone economy, although investors expected the QE package to be larger than announced.
- The EURUSD pair is only bearish while trading below the 1.1000 level, key support is found at the 1.0960 and 1.0880 levels.
- If the EURUSD pair trades above the 1.1000 level, buyers may test towards the 1.1160 and 1.1210 resistance levels.
The British pound currency rose to its strongest level in nearly two-months against the greenback this week, following solid data from the United Kingdom economy. UK monthly GDP data grew by 0.3 percent, which marked the best UK growth figures since January this year. UK average wage earnings also increased to levels not seen since 2008, hitting 4.0 percent, which helped to push-back fears of a slowdown in the UK jobs market. Brexit fears also eased, as UK Parliament blocked a hard-Brexit scenario and an attempt to hold a UK General Election next month.
- The GBPUSD pair is only bearish while trading below the 1.2195 level, key support is found at the 1.2020 and 1.1960 levels.
- If the GBPUSD pair trades above the 1.2195 level, buyers may test towards the 1.2385 and 1.2480 resistance levels.
Bitcoin spent the majority of the trading week in a narrow trading range as the cryptocurrency market suffered from a lack-of-direction. Bitcoin fell below the $10,000 level as the cryptocurrency suffered a strong technical rejection from just below $11,000 technical area. Volatility in the BTCUSD pair also sank to its lowest level since May this year, alongside weak trading volumes. The altcoin space also came under pressure, although Ethereum and Litecoin managed to post minor trading gains.
- The BTCUSD pair is only bullish while trading above the $10,000 level, key resistance is found at the $11,000 and $11,700 levels.
- The BTCUSD pair is only bearish while trading below the $10,000 level, key support is located at the $9,400 and $9,100 levels.
Risk sentiment improved this week, following positive tones from both Washington and Beijing over upcoming trade talks. US President Trump delayed the implementation of the latest Chinese trade tariffs, while Chinese officials offered to buy more US agricultural products. US Treasury Secretary Steve Mnuchin also provided bullish commentary over future trade talks. The Japanese yen currency fell broadly as risk-sentiment improved, while the Australian Dollar recovered above the 0.6800 level.
- USDJPY is bullish while trading above the 106.90 level, key resistance is found at the 108.20 and 108.80 levels.
- If the USDJPY pair trades below the 106.90 level, key support is located at the 106.40 and 106.00 levels.