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EUR/USD: a quick glance back - FXStreet

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that the American dollar closed last Friday broadly higher against most of its major rivals, although gains were not enough to erase its previous losses in most of the cases.

    Key Quotes:

    "The trigger for dollar's rally was the Bank of Japan, as the Central Bank introduced negative rates, announcing of a -0.10% interest rate on current accounts that financial institutions hold at the BOJ. Also helping the greenback was the release of the US Q4 advanced GDP data, with a small downside surprise, as it showed a 0.7% growth against the 0.8% expected.

    The slowdown in the US by the end of 2015 was already anticipated by the FED last Wednesday, and it seems that market's players had priced in an even lower reading ahead of the release, given that the currency gained sharply after the announcement. The rally stalled with the release of the final Michigan sentiment index that declined to 92.0 during January.

    The EUR/USD pair closed the week at 1.0832 after being rejected by a daily descendant trend line in an advance up to 1.0967, a zone in where the pair had met selling interest several times over the past January. Holding near the base of its range, the pair continues lacking long term definitions, as it has been trapped for over a month in a 200 pips' range.

    Short term the 4 hours chart maintains the risk towards the downside, given that the technical indicators are standing below their mid-lines, and the price below the moving averages. The immediate resistance for this Monday comes at 1.0845, a Fibonacci level, while the main support is the 1.0770/800 region."
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