Key Economic Data - Coming Up Today(All Times GMT+2)
News released yesterday indicated that the European Central Bank is preparing a Quantitative Easing of €50Billion a month over the next 21-24 months amounting to approx €1.2 trillion ($1.38trillion). Earlier reports had suggested that the QE would be in the region of €650 billion and the new developments are likely to be long-term positive for the ailing European economy. Initially the EURUSD fell from 1.1641 to 1.1565, an 86pip move, before climbing above 1.1675 in a 110 pip reversal higher. Once more the pair declined to 1.1565 and has since been ranging between 1.1565 and 1.1630. The early signs based upon the lack of direction following the leak of news is that market participants are unsure of the effect of the QE and are weighing the pros and cons ahead of the ECB Press Conference this afternoon. It is expected that Mario Draghi will officially unveil the QE after the Minimum Bid Rate decision. There is more to the announcement than the outright size. The most important factor is the size of the QE although several qualitative factors are just as important to observers. For instance we have heard that Greece will be excluded from the QE if so this is a blow to chances of Greece remaining within the common currency union. How and when will the purchases be made? Will the ECB buy the bonds or is this the role of the national central banks? In addition at what prices will the securities and sovereign bonds be accumulated? Most of these questions are likely to be answered by Mario Draghi today, and the journalists at the Press Conference will surely ask about this information and more. Today will be a crucial day in the future of the Eurozone and the Euro currency going forward.
In other developments yesterday the Bank of Canada unexpectedly cut its main lending rate from 1% to 0.75% causing the CAD to weaken across the board. The USDCAD rose from 1.20 pre-release to 1.2375 a 375pip move in the biggest one day move in the USDCAD for several years. The Central Bank cited the sharp declines in commodities as well as Crude Oil for exposing the Canadian economy to strong downside risks. The interest rate cut will help the economy weather the headwinds it faces now from falling resource export revenues. This morning the Spanish Unemployment Rate rose from 23.6% to 23.7% in a sign that the Spanish economy is yet to recover as strongly as has been expected in recent months. Coming up at 12:45GMT the EUR Minimum Bid Rate followed at 13:30GMT by the ECB Press Conference and the USD Unemployment Claims. Other important data released this afternoon includes the USD HPI (House Price Index) and the EUR Consumer Confidence followed by the Crude Oil Inventories. The Crude Oil data will be closely watched as steep declines in oil have had a large effect on the global economy and in particular nations that receive large revenues from oil production and export.
EURUSD Support areas include 1.1550, 1.1500, 1.1400, 1.1350, 1.1300, 1.1250, 1.1175, 1.1100, 1.10. Resistance levels above are at 1.1700, 1.1800, 1.1975, 1.2000, 1.2200, 1.2300, 1.2380, 1.2402, 1.2444, 1.2500.
EURUSD 5 Minute Chart
EURUSD 30 Minute Chart
EURUSD 4 Hour Chart
EURUSD Pivot Point Table