24 September, 2015
Draghi disappointed and wasn’t as dovish as expected. This helped the EURUSD rally. This morning the pair has been fighting the 1.1214 resistance today and even formed a 4h pin bar at the level but has now pushed itself through the level. The last week’s low at 1.1214 caused the resistance. As the pair is trading near the lower end of the weekly price range and encouraged by the turnaround at the support yesterday traders were able to push the price higher. Nearest support range is at 1.1017 – 1.1087 while the first resistances are at 1.1261 and then 1.1388. The pair will face 4h Bollinger bands and the 50 period SMA at the same levels with the 1.1261 resistance.
Elsewhere EURCHF has reinstalled itself in the mid-1.09s after ECB’s Draghi didn’t produce the dovish sound-bites that many had expected at his testimony before the European parliament yesterday. The Swiss economy minister Schneider-Ammann also said yesterday that “we travel in the direction of purchasing power parity,” and that “his journey is not yet finished, as purchasing power remains significantly above 1.20 Swiss francs per euro.”
The SNB’s announcement of unchanged policy last Thursday, and a renewed pledge to intervene in the currency market if needed, had little impact. The central bank continues to class the franc as being “significantly overvalued,” though it has had some success in undermining the franc’s status as a safe haven, with deeply negative deposit rates having caused a steady drip feed of yield-searching Swiss fund outflows. The franc is trading some 6% lower than levels seen a couple of months ago.
German Ifo business confidence unexpectedly improved in September, driven, not by an improvement in the current conditions reading but a rise in the expectations number, the first since July. The current conditions index actually dipped. Overall readings remains at high levels and the diffusion index showed that optimists now outnumber pessimists across all sectors. The breakdown also reveals that sentiment remains driven by consumption and retail trade, with low unemployment, sizeable wage gains and low inflation boosting real disposable income.
German consumer confidence drops sharply.The Gfk consumer confidence reading for October fell to 9.6 from 9.9 in the previous month. The much weaker than expected number adds to concerns about the outlook, although the overall reading remains at a very high level in a long term comparison. The breakdown, which is available until September, shows a sharp decline in overall business expectations, which also depressed income expectations and the willingness to buy.
French Sep business confidence held steady at 100 in September, but manufacturing confidence improved on a marked rise in the own company production outlook to 14 from 8 in the previous month. The better than expected numbers tie in with the improvement in France’s PMI readings, released yesterday, which suggested a move back into expansion territory for both services and manufacturing sectors. Still, today’s survey also showed the reading for overall order-books falling further into negative territory, despite the fact that foreign order books remained stable.
Currency Movers Charts
Over the last five days GBP has lost a lot of ground against all the other competitors except AUD which has been the weakest of the lot. This has brought the GBPUSD to levels that could attract buyers. It is trading at weekly Bollinger bands and at a daily pivotal candle but the nearest resistance level is fairly close at 1.5330 while the nearest support level is at 1.5162. Other GBP pairs are also near support levels: GBPCAD bounced yesterday and formed a daily pin bar and GBPNZD has fallen to 4h Bollinger Bands and has pivotal support nearby.
AUDUSD is approaching daily Bollinger bands and support which indicates that it is time to close the shorts opened after the shooting stars were formed.
Significant daily support and resistance levels for these pairs are:
Main Macro Events Today
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