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1 Oct 2013
EUR/USD mixed ahead of ECB tomorrow
FXstreet.com (London) - With a high of 1.3589 and a low of 1.3517 in the EUR/USD and settled on the offer ahead of the ECB tomorrow in complacent markets, markets might recall when the dollar, more or less, ignored the last partial US government shutdowns seen in 1995/1996, explained research teams at TD Securities.
“Investors generally seem to feel that any shutdown is unlikely to last and so US economic damage will be limited (ballpark estimates suggest the shutdown will cost 0.1-0.2% pp off of GDP per week). But the longer the shutdown, the greater the overall damage”. Markets will be looking to the ECB tomorrow. “The meeting will actually take place in Paris”, said the research teams at TD Securities. “We look for the ECB to underscore its dovish bias due to 1) the firm exchange rate and uncertainty prompted by Italian politics representing headwinds for the growth outlook and 2) recent data releases reflecting weaker than expected inflation and pronounced weakness in credit growth (final September PMI reported at 51.1, down modestly from August’s 51.4). No new policy initiatives are expected…” In Germany, this morning, the unemployment rate came in worse and the change was a difference in expectations of 30k. For the UK, Markit Manufacturing PMI printed poorly at 56.7 vs 57.3 expected”.
EUR/USD Levels
The 20 DMA is 1.3370, the 50 DMA is 1.3328 and the 200 DMA is 1.3173. RSI (14) 48.89. Supports are ascending from 1.3452, 1.3478, 1.3492 and 1.3512. Spot is currently 1.3525. Resistances are 1.3546 1.3569, 1.3598 and 1.3711.
“Investors generally seem to feel that any shutdown is unlikely to last and so US economic damage will be limited (ballpark estimates suggest the shutdown will cost 0.1-0.2% pp off of GDP per week). But the longer the shutdown, the greater the overall damage”. Markets will be looking to the ECB tomorrow. “The meeting will actually take place in Paris”, said the research teams at TD Securities. “We look for the ECB to underscore its dovish bias due to 1) the firm exchange rate and uncertainty prompted by Italian politics representing headwinds for the growth outlook and 2) recent data releases reflecting weaker than expected inflation and pronounced weakness in credit growth (final September PMI reported at 51.1, down modestly from August’s 51.4). No new policy initiatives are expected…” In Germany, this morning, the unemployment rate came in worse and the change was a difference in expectations of 30k. For the UK, Markit Manufacturing PMI printed poorly at 56.7 vs 57.3 expected”.
EUR/USD Levels
The 20 DMA is 1.3370, the 50 DMA is 1.3328 and the 200 DMA is 1.3173. RSI (14) 48.89. Supports are ascending from 1.3452, 1.3478, 1.3492 and 1.3512. Spot is currently 1.3525. Resistances are 1.3546 1.3569, 1.3598 and 1.3711.