EURUSD: Euro firmer ahead of today’s ECB Meeting by FX Charts Daily

EUR/USD: 1.0653
The dollar is lower today after the IMF lowered its growth forecast for the US economy in its world economic outlook update. For 2015, US growth forecast was revised down to 3.1%, comparing to prior 3.6%, while for 2016, the US growth projection is predicted to be 3.1% (prev 3.3%). At the same time, growth projection for the EU, Japan and UK were raised. Elsewhere, the US Retail sales rose 0.9% in missing the expectation of 1.0%, while the PPI dropped to -0.8% yy in March versus expectation of 0.9%. Earlier the EU industrial output was better than expected at +1.1% (vs +0.4% exp) and helped to underpin the Euro.Today is going to be a another busy one with plenty of data coming on stream, the highlight being the ECB Meeting, although no change to Monetary Policy is expected. With QE already under-way and pre-committed until September 2016, and also with the recent EU growth outlook showing a glimmer of positive light, including a mild uptick in the inflation forecasts, Draghi could even be mildly hawkish on at today’s Press Conference, which could potentially push the Euro a bit higher. However, with the next FOMC Meeting due on April 28/29, any major gains seem unlikely in the event of a potential June rate hike, although I suspect September is the more realistic use-by date.

Technically, after having risen to a high of 1.0706, Euro is now sitting in the middle of the day’s range, although the short term charts show the potential for further gains back towards 1.0700. The 100 HMA is currently supporting the price action and if we do head higher then back above the 1.0708 high would see further progress towards 1.0715 (38.2 of 1.1035/1.0520) and then to the daily Kijun at 1.0755 and then to the stronger level (200 HMA/50% pivot  of 1.1035/1.0520 /daily Tenkan) at 1.0775. It would take quite a hawkish Draghi to get the Euro above here, but the next port of call would be at 1.0800 and then at 1.0835 (76.4%)

On the downside, back below 1.0600 would see a run towards lows of the last couple of sessions in the 1.0520/30 area. The dailies remain negative, and a break of 1.0520 would signal a run to 1.0500 and then towards the previous, 13 Mar, 1.0461 low. Beyond there, support is again rather thin until we meet the March 2003 low at 1.0334.  Under this would likely see another acceleration lower, as there is then very little left to hold it up ahead of the major descending channel base at around 1.0200 (monthly chart below) and then at the Fibo support at 1.0069 (76.4% of 0.8225/1.6037), below which parity will become a magnate.

The Feds Kotcherlakota is speaking in the Asian time zone but the major focus will be on the China GDP, ahead of the main action of the day at the ECB Press Conference.

Economic data highlights will include:

German CPI, EU Trade Balance, ECB Interest Rate Decision/Press Conference,  New York Sate Manufacturing Index, US Industrial Production , Capacity Utilisation, NAHB Housing Market Index, Beige Book, Fed Bullard/Kotcherlokata  Speech.


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