EUR/USD Snaps Bearish Series Despite Dovish ECB; Inverse H&S in Play?

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EUR/USD Snaps Bearish Series Despite Dovish ECB; Inverse HS in Play?

NZD/USD Struggles during Former-Support; New Zealand Retail Sales May Offer Little Relief.

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EUR/USD Daily

EUR/USD Daily Chart

Chart – Created Using Trading View

  • EUR/USD might theatre a incomparable liberation over a days forward as it clears a new array of revoke highs lows, and a break/close above a former-support section around 1.0660 (50% expansion) to 1.0680 (78.6% expansion) might coax a pierce towards a monthly high (1.0829) as a span mostly marks a extended operation from late-2016; might see flourishing bets for an different conduct shoulders as prolonged as a span reason above 1.0469 (38.2% expansion) to 1.0500 (50% expansion), yet a broader opinion stays slanted to a downside as a European Central Bank (ECB) continues to lift out a quantitative easing (QE) program, while Fed Fund Futures continue to cost a larger than 60% luck for a Jun rate-hike.
  • The ECB process assembly mins advise a executive bank is in no rush to pierce divided from a easing-cycle as officials disagree a ‘recent pick-up in acceleration had been especially driven by an boost in appetite prices,’ and a Governing Council might keep a doorway open to serve expand/extend a asset-purchase module as President Mario Draghi and Co. advise ‘‘recent enlivening developments in acceleration expectations and a prospects for a postulated composition in acceleration towards a Governing Council’s acceleration aim could be put during risk. Therefore, a Governing Council was seen as good suggested to sojourn studious and say a “steady hand” to yield fortitude and predictability in an sourroundings that was still characterised by a high turn of uncertainty.
  • The new tongue suggests a ECB might boost a bid to sentinel off a ‘taper tantrum’ as a executive bank is on march to revoke a asset-purchases to EUR 60B/month starting in April, and a cabinet might have small choice yet to lengthen a non-standard measures as ‘the change of risks to a euro area opinion was deliberate to sojourn slanted to a downside, overdue especially to uncertainties surrounding a prospects for unfamiliar direct growth.
  • Need a tighten above 1.0660 (50% expansion) to 1.0680 (78.6% expansion) to open adult a subsequent topside area of seductiveness around 1.0780 (100% expansion) to 1.0790 (38.2% expansion) followed by a Feb high (1.0829).

NZD/USD Daily

NZD/USD Daily Chart

Chart – Created Using Trading View

  • NZD/USD stands during risk of giving behind a allege from progressing this week as a span struggles to pull behind above former-support around 0.7240 (61.8% retracement) to 0.7270 (78.6% retracement), with a broader opinion slanted to a downside as it appears to be adapting to a bearish trend carried over from a summer months; a near-term developments in a RSI also indicate to a serve decrease in a sell rate as it responds to a bearish arrangement from Jul and pulls behind from trendline resistance.
  • A 1.0% allege in New Zealand Retail Sales might hint a bullish greeting in a kiwi as it boosts a opinion for enlargement and inflation, yet a information imitation might do small to change a financial process opinion as a Reserve Bank of New Zealand (RBNZ) steadfastly warns ‘numerous uncertainties remain, quite in honour of a general outlook, and process might need to adjust accordingly;’ with Governor Graeme Wheeler schedule to step down in September, it seems as yet a executive bank will keep a standing quo via a first-half of a year, yet officials might harden a written involvement on a internal banking as they disagree ‘a decrease in a sell rate is needed.
  • Will keep a tighten eye on a weekly range, with near-term support entrance in around 0.7100 (38.2% expansion) to 0.7120 (50% retracement), yet a break/close subsequent a Fibonacci overlie might open adult a subsequent downside aim around 0.7040 (50% retracement) to 0.7060 (38.2% retracement).

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— Written by David Song, Currency Analyst

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