The Euro ended its streak of winning days and finished yesterday’s session in the red. The market is in a pullback phase after bottoming around parity. Given the record lows, a deeper correction can be expected towards the resistance at around 1.0350 – 1.0365. After this test, the expectations are for the general downtrend to continue and for prices to retest the area at around 1.0000. In the early hours of today, the rate of the euro against the greenback is gravitating around the 1.0186 support and the first resistance for the bulls is 1.0270. If it is overtaken, then the chances for a test of 1.0350 would increase significantly. The ECB interest rate decision is due today (12:15 GMT) and a rate hike could support the euro. Investors will also look forward to the subsequent press conference (12:45 GMT) on the bank’s future monetary policy.
This morning’s decision by the Bank of Japan to leave the key interest rates unchanged did not surprise the markets. The expectations are for a new rally and more stress for the yen. The first resistance is 138.42, which is about to be breached while a main and confirmed support for the day is 137.43. The first target for the bulls is the peak at 139.35, and the breach can be expected to lead them towards 140.00.
The Cable has broken the short-term downtrend and the market is entering a deeper retracement phase. For now, the bulls remain limited by the resistance at 1.2030, but if it is breached, then a test of the zone at 1.2120 is expected. First supports for the buyers are 1.1960 and 1.1910. With more serious bullish pressure in place, a test of the key resistance at 1.2170 is also possible, with expectations for a new wave of sell-offs flooding the market once this zone is reached.
The German index is giving up some of its weekly gains, with prices managing to hold above the 13140 support for the time being. The 13430 area comes from the higher time frames and a potential breakout would require a market catalyst. The expectations are for this level to be tested today as well, and if the bulls don’t succeed, then the bears might grow even mightier. Today, increased activity can be expected around the ECB interest rate announcement at 12:15 GMT. The first support for the bulls remains at 13140, followed by the more substantial zone at 12940.
The US30 ended the session almost unchanged, holding onto its weekly gains. Yesterday, the support at 31640 was tested and withstood the bearish pressure. If the market manages to hold above 31500, then the bulls have a chance to rally towards 32620. The main weekly support remains 31080, but a test of the zone is not ruled out. A failure for the bulls to charge past 32000 may encourage the bears for a new push, with their first target being 30750.