After a series of central bank meetings, the foreign exchange market entered a phase of strong consolidation.
ECB Monetary policy decision.
At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:
(1) The interest rate on the deposit facility will be decreased by 10 basis points to -0.50%. The interest rate on the main refinancing operations and the rate on the marginal lending facility will remain unchanged at their current levels of 0.00% and 0.25% respectively. Continue reading
The EURCHF currency pair has been in a downtrend for 4 months.
For the last 20 days, we have seen consolidation on the pair, which is highlighted in the chart by a blue rectangle. Over the past three days, we have seen an unsuccessful attempt to break through the lower edge of the consolidation range, which led to the formation of a bear trap on the EURCHF. Continue reading
In the previous article I noted the formation of a technical triangle on the euro-dollar currency pair (on the chart it is a red triangle). The breakdown of the lower edge of this triangle led to the removal of euro buyers’ stops and the impulse movement down almost by one figure.
However, this breakdown turned out to be false and euro buyers were able to return the pair inside the triangle and return to the balance of supply and demand. Continue reading
The daily volatility of the euro-dollar currency pair (EURUSD) on the foreign exchange market has reached its lowest levels in the last five years.
Such a low value of the daily indicator ATR (14) was last observed in June 2014. Continue reading
The euro-dollar currency pair is in consolidation for 5 months. The consolidation range is highlighted on the daily chart with a blue rectangle and limited to the range of values 1.12145-1.15000.
But any ranges at some point end. It’s time for traders to make a decision. Continue reading
At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively.
The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. Continue reading
Yesterday we wrote on our website about the triangle formed on the US dollar index – Geometric metamorphosis of the US dollar index (USDX).
Trade wars and an endless stream of US sanctions force even America’s close allies to work out measures to protect their own financial systems and business.
The European Commission plans in the near future to submit its proposals for replacing the dollar in European financial transactions. Continue reading
The agreement between US and China at the last G20 summit led to a decrease in tensions in financial markets. The risk appetite led to demand, including for the single European currency. However, the long-term trend of the US dollar growth on forex is still in force.
What technical levels do traders of the EURUSD pair need to monitor in the foreign exchange market? Continue reading
The last five months, the EURUSD currency pair has been trading in a fairly wide range on the forex market.
On the pair chart, this range is highlighted with a blue rectangle and is limited to 1.13000 -1.18500. Continue reading
As a result of the rapid growth of the US dollar, the main currency pairs on forex reached key levels.
Exit from the technical figure of the triangle, the breakthrough of the mirror level of 90.850 and the exit from the long-term descending channel led to the rally on the US dollar (USDX).
The upward movement stopped by testing the next strong mirror resistance level at 92.400.
At the same time, the euro reached the level of 1.20, the British pound – 1.36, the Australian dollar fell to the key level of 0.75, the Canadian dollar reached 1.29, and the Japanese yen closely approached the level of 110.00.
The euro after a long consolidation at the perennial highs came down from the long-term rising channel. This was also due to the breakout of the triangle down and the breakdown of key support 1,21550.
Currently, this level is a mirror resistance and with a high probability the euro can test it before continuing its decline.
The fall of the British pound was due to poor economic data and, as a consequence, a decrease in the probability of an increase in the interest rate by the Bank of England. The pound left the growing channel for the first time in a long time and stopped only at a strong mirror support level of about 1.36.
Today, the data on the index of business activity in the construction sector in the UK is expected, but they are unlikely to help reverse the trend to reduce the pound due to extremely bad weather in the reporting period.
The Fed’s decision on the interest rate is expected this evening. Since this meeting will not be accompanied by a press conference, experts do not pawn the possibility of raising rates on it. The main attention will be paid to the accompanying statement to the decision. In the case of a more rigid position of the regulator, one can expect a continuation of the trend towards strengthening the US dollar.
Let me remind you that the latest data on inflation in the US, although it showed a slight slowdown in inflation over the past month, annual inflation reached target 2.0%. This gives all grounds for raising the rate at the next meeting.
Correction on the dollar, which we are observing today, is quite possibly connected with the fixing by the bulls on the dollar of profit in the lead-up to the Fed meeting to reduce risks.
The second day of the decline in the EURUSD currency pair led to testing by a pair of long-term ascending trend lines.
This trend line is the lower boundary of a long-term growing symmetrical channel. Continue reading