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1 Nov 2013
Euro lost in a sea of red, shallow pullbacks prevail
FXstreet.com (Barcelona) - The EUR/USD exchange rate continues to deteriorate over the course of the Asian session, with sellers adding further pressure to record a new weekly low of 1.3540, which represents almost 3 cents below this week's peak.
The large impulsive leg down since the CPI numbers in Europe has failed to be challenged by buyers, which continued to unwind long positions as they headed to the exits in panic. Mood to support EUR on dips remains very poor, as represented by Thursday's day candle, which shows prices selling-off since the publication of the FOMC monetary policy meeting down to present times.
The latest economic indicators out of the Eurozone, which raises evidence on the risk of deflation faced by the EZ bloc, has forced big market players to start pricing bolder policy actions by the ECB, which meets next week. Talk in the street has it that the ECB may have no choice but to cut the policy (refi) rate from 0.50% to 0.25%, while keeping the deposit rate at 0%.
The magnitude of the fall seen in the last 24 hours has been such that a trader should refer back to the EUR/USD 15m chart to gauge the astounding loss of confidence towards the Euro, with bounces failing to accumulate more than 25 pips as price builds a strong correlation with its 15m 20-EMA, excellent 'equilibrium point' indicator having capped prices in a minimum of 4 occasions.
The large impulsive leg down since the CPI numbers in Europe has failed to be challenged by buyers, which continued to unwind long positions as they headed to the exits in panic. Mood to support EUR on dips remains very poor, as represented by Thursday's day candle, which shows prices selling-off since the publication of the FOMC monetary policy meeting down to present times.
The latest economic indicators out of the Eurozone, which raises evidence on the risk of deflation faced by the EZ bloc, has forced big market players to start pricing bolder policy actions by the ECB, which meets next week. Talk in the street has it that the ECB may have no choice but to cut the policy (refi) rate from 0.50% to 0.25%, while keeping the deposit rate at 0%.
The magnitude of the fall seen in the last 24 hours has been such that a trader should refer back to the EUR/USD 15m chart to gauge the astounding loss of confidence towards the Euro, with bounces failing to accumulate more than 25 pips as price builds a strong correlation with its 15m 20-EMA, excellent 'equilibrium point' indicator having capped prices in a minimum of 4 occasions.