EUR/USD
Due to the aggregation of several significant pieces of news, yesterday was a very significant day for the euro. Specifically, the departure of Mario Draghi, the Italian prime minister, who was tasked with steering the nation out of its escalating crisis. The ECB’s 50 basis point rise in the deposit interest rate, which had not been done in a decade, was as significant. Around the start of the European session, the day saw a small advance, but after it reached the crucial level of 1.0220, the bulls slowed down in anticipation of the news. The pair went higher once more as volatility increased surrounding the unexpected 50 basis point rate hike, but after encountering resistance near 1.0270, the euro began an aggressive correction, hitting support and ending the day around 1.0200. The release of data revealing managers’ rates of flash manufacturing and services in EU nations will take place from 08:15 GMT to 09:30 GMT today, which is also a significant day for the single European currency. The level at 1.0270 will be the first goal if the bulls decide to launch another attack, but if the bears maintain control, EUR/USD may once more aim for 1.0120.
USD/JPY
Due to the declining value of the dollar and the fact that the levels around 138.85 served as resistance twice in the space of four hours, the bulls abandoned additional assaults, the corrective move is still in progress. Clearly in charge for the remainder of the day, the bears were able to bring prices crashing down by 140 pip and reach back around the support at 137.45. If the aforementioned support does not hold, it is extremely likely that the downward move will continue. However, if the reaction to the data is favorable, we may anticipate USD/JPY to resume its upward trend. Today’s eyes are on US Preliminary Manufacturing PMI data at 13:45 GMT.
GBP/USD
The pair once again reached levels of 1.2000 towards the start of the European session, but the balance of power tipped in favour of the bears, who launched a fierce attack that drove the GBP/USD down to 1.1930. The ECB’s decision to hike interest rates in the EU by 50 basis points—a move that had not been made in ten years—caused a rise in volatility, which had an impact on the Cable as well. The market experienced an intense correction that went as far as 1.1890, but the bulls found favourable levels to stop the slide and the pair was able to close above 1.1960. The information from the UK Flash Manufacturing and Services Managers’ rate is the subject of much attention today at 08:30 (GMT). Whether the uptrend resumes depends on traders’ reaction to the data release.
EUGERMANY40
Yesterday, when the European session began, it became clear that the day would be tumultuous for the EUGERMANY40. The bulls had the upper hand at the start of the session, but after the index reached the levels of 13353, an aggressive correction started. The German index returned to the area between 13185 and 13353 after support was located there. The bear attack was convincing and succeeded in pushing prices as far as 13095. Germany is scheduled to provide the information in the flash manufacturing and services managers’ estimate at 09:30 today (GMT). The response to today’s data and other factors will determine if the German index breaks out of its range.
US30
Yesterday, the blue chip index was locked in a narrow range between 31930 and 31650. Around the time the ECB decided to raise interest rates by 0.50 percent, volatility spiked sharply at 13:30 (GMT). After the release of the data, US30 prices started to quickly correct downward, but after they reached about 31510, the bulls entered the market and were able to drive the price to a new weekly high of 32045. Prices again ended the day close to the previously indicated range after a correction, though. Today’s attention is on the 13:45 US PMI (GMT). If the market reacts favourably to the data , the weekly upswing may continue and 32045 may be passed; nevertheless, if the data disappoints then the index might search for a bottom below 31500 is likely.
