Market Research and Analysis

Daily Market Analysis Report

Fri, 09 Dec 2016 03:51 AM GMT

Author: Senior Forex Analyst, Arslan Ali Butt

  • Daily Trading Range:
  • 1.0750 – 1.0500
  • Support & Resistance Levels:
  • R3: 1.0969
  • R2: 1.0864
  • R1: 1.0799
  • Pivot Point: 1.0694
  • S1: 1.0589
  • S2: 1.0524
  • S3: 1.0419
  • Trading Recommendation:
  • Sell Below: 1.0655
  • Take Profit:
  • 1st @ 1.0540
  • Stop Loss @ 1.0680

EURUSD

EURUSD has declined dramatically to trade near 1.05950 on Thursday, as the Euro as a single currency weakened after the ECB Press Conference. As suggested in a previous report, “Investor’s main focus remains at the ECB Press Conference as well as the Minimum Bid Rate. In my opinion, they are likely to keep the rate unchanged near to zero, but traders should keep a close eye on it as in the case of any surprise, there will be a massive move to catch.” Whereas, the ECB action regarding QE program diminished the demand for Euro. Overall the high to low movement remained 277 pips with a high of 1.0874 and a low of 1.0613.

9-dec-eur
Fundamental Overview

Fundamentally, ECB announced it would extend its asset purchases from April through December next year, but at a modestly slower pace of 60 bln euros rather than 80 bln euros. We had been expected a six-month extension but without tapering. This would have added 480 bln euros and instead what the ECB will buy is 540 bln euros. The ECB will also expand the range of maturities it buys, and will allow the purchases of instruments yielding less than the minus 40 bp deposit rate. Ultimately making Euro bearish.

Today on Friday, the investors are recommended to monitor the following events:

EUR

  • German Trade Balance
  • French Gov Budget Balance
  • French Industrial Production m/m

USD

  • Prelim UoM Consumer Sentiment
  • Final Wholesale Inventories m/m
  • Prelim UoM Inflation Expectations

Technical Overview

EURUSD pair trades below a strong resistance level of 1.0680 and holding above a significant support level of 1.0500. RSI value has dramatically shifted downwards to 35 from 51. Moreover, the pair has a resistance around 1.0695 and 1.0790, while the intra-day support prevails at 1.05885 and 1.0505.

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