EUR/USD: After the ECB decision _09/09/2016

Trading recommendations

Sell ​​in the market. Stop-Loss 1.1310. Targets 1.1200, 1.1180, 1.1100, 1.1045

Buy Stop 1.1320. Stop-Loss 1.1260. Targets 1.1350, 1.1400, 1.1430, 1.1485, 1.1535


Technical analysis

The last three months of movement of the pair EUR / USD is mainly in the range between the levels of 1.1430, 1.0975. Median line range and is the level of 1.1180. A narrower range was formed in August. It is located between the levels of 1.1350, 1.1045.

On the weekly chart, the EUR / USD remains in ascending channel, the upper limit of which is held near the 1.1785 resistance level (EMA144 and Fibonacci level of 38.2%). On the daily chart also formed a new ascending channel with the upper border close to the 1.1430 level.

Despite today's strengthening of the US dollar in the currency market is probably less pronounced decline in the pair EUR / USD. It is also possible to maintain the positive trend of the pair on a background of European asset sales (euro is the currency of funding) and the weak macroeconomic statistics from the US, which greatly reduces the likelihood of higher interest rates in the US in the near future.

 OsMA and Stochastic indicators in different time frames show a mixed picture, pointing to the absence of clearly-marked dynamics of the pair EUR / USD. Today is the last trading day of the outgoing, busy news week. And the market is profit-taking on short positions against the US dollar. However, EUR / USD, there are several different pictures.

Most likely, the movement of the pair in the ranges mentioned above remain, at least until the Fed's two-day meeting on 20-21 September. This looks like the most probable preservation of positive dynamics and finding the pair above the 1.1180 level.

Support levels: 1.1200, 1.1180, 1.1100, 1.1045, 1.0975, 1.0915, 1.0865, 1.0825

Resistance levels: 1.1285, 1.1350, 1.1400, 1.1430, 1.1485, 1.1535


Overview and Dynamics

Despite the current weak macroeconomic statistics the euro area and a clear threat of deflation in the region, the European Central Bank on Thursday left its monetary policy unchanged. ECB President Mario Draghi in a subsequent speech for the first time in more than two years did not announce new stimulus measures. Also, there were no signals that preparing any action in this regard. The euro rose to solve ad, and then became to decline sharply during the speech of Mario Draghi. European stocks and government bonds also fell after a speech of M.Dragi.

Data released earlier in the week by Eurostat, also pointed to a slowdown in household and government spending. Moderate growth in euro area GDP in the 2nd quarter was 0.3% (+ 1.6% yoy). The growth rate of the Eurozone’s GDP in the 1st quarter compared to the previous quarter was revised to 0.5% from 0.6%. Thus, the growth of the euro area economy as a whole in the first half of the year was weaker than previously reported. On the European Commission's findings were published last week that pointed to loss of confidence in the euro-zone companies and households in August. The Central Bank can not also achieve the target inflation rate for more than three years.

With the opening of today's trading day and during the European session, the dollar is growing on the foreign exchange market against most currencies. Decreases in the price of gold and oil, despite the publication of data yesterday from the US Department of Energy, testified to a strong decline in US oil inventories (-14.513 million barrels).

Also pay attention to the speech today at 11:45 (GMT) President of the Federal Reserve Bank of Boston Eric Rosengren, who had previously spoken out in favor of maintaining a soft monetary policy and then changed their views on the opposite. I wonder what he would say after the negative US economic indicators received earlier in the week, and after yesterday's ECB meeting.