European Open Asian Equities Extend Rally GBPAUD Hits 3 Month High
With traders their most bearish on AUD futures in a year and the UK still on track to ease lockdown restrictions, GBP/AUD may be able to extend gains from its 3-month high.
Share this:
The EUR/USD (daily chart shown below) plunged further on Thursday after the European Central Bank (ECB) issued a statement during its press conference that left interest rates unchanged at record low levels, lowered its inflation and economic growth forecasts, and indicated a willingness to extend its bond purchasing program if needed.
This bearish development for the euro, coupled with a resilient US dollar on Thursday morning, brought the EUR/USD tumbling back down towards key support around the 1.1100 level. This further drop follows a sharp retreat during the past week and a half that has given back much of the gains made during the greater part of August.
Those August gains saw the currency pair surge dramatically above its 200-day moving average and key resistance levels, including the noted 1.1100 level as well as 1.1400. The surge did not end until EUR/USD climbed briefly above the 1.1650 resistance level and then began its sharp retreat.
Having dropped back down to approach the 1.1100 level on Thursday, the currency pair has also re-approached its 200-day moving average to the downside once again.
With the distinct possibility of additional ECB quantitative easing and continued low interest rates in the Eurozone, as well as the probability of an impending interest rate hike in the US, the directional bias for the EUR/USD continues to be strongly to the downside.
With any sustained breakdown below the 1.1100 level and 200-day moving average, the key downside price target for the short-term continues to reside around the 1.0800 support level, last re-tested in mid-July. On a longer-term basis, continued declines for the currency pair should target further downside support around the 1.0500-area lows. Upside resistance on any reactive rebound remains around the 1.1400 price level.
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
AUD/USD hammered by US yields and fading RBA hike bets
US yields, dollar strength and fading RBA hike bets have combined to drive AUD/USD to fresh multi-month lows. The macro and technical bias remains bearish, although history suggests parts of the move are now reaching unusually stretched levels.
Japanese Yen Outlook: USD/JPY, GBP/JPY, AUD/JPY Setups
USD/JPY and GBP/JPY show signs of stabilising, while AUD/JPY remains vulnerable as yen crosses deliver mixed technical signals.
S&P 500 Forecast: SPX Continues to Drift Away from Record Highs
Recent trading sessions have done little to restore confidence in the equity market. Over the last four sessions, the S&P 500 has declined by nearly 1.00%, a move that highlights growing short-term weakness and keeps the index moving further away from its record-high territory.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.