The BOJ brought loads of noise across the FX board overnight, although European currencies barely reacted to it. Nevertheless, stocks are stronger in the region tracking their overseas partners, as the decision of leaving rates unchanged at -0.1% fueled bank stocks rallies. A short-lived dollar rally sent the EUR/USD pair down to 1.1122, the lowest since August 21st, from where it bounced modestly, now meeting short-term selling interest around 1.1160.
The focus is now in the FED's economic policy decision to be announced in the US afternoon. The US Central Bank is largely expected to maintain its rates unchanged, although a hawkish tone is expected, somehow confirming a rate hike before year-end.
Technically, the risk is towards the downside, as the price continues developing below a bearish 20 SMA, whilst indicators have been rejected from their midlines, and maintain bearish slopes within negative territory. Anyway, upcoming direction is about the FED: a hawkish tone that supports dollar's rally should see the pair breaking through 1.1120, and see the price falling down to the 1.1040/50 region, a daily ascendant trend line coming from November 2015 low at 1.0505.
A dovish stance from US officers should see the pair regaining the 1.1200 figure, with scope then to extend its gains up to 1.1280.
Comments
Log in or sign up to join the conversation.