3-12-2015 - The eyes are on the ECB next easing step, After paving for it

walid · 03-12-2015, 08:20 AM

• EURUSD has faced downward pressure yesterday following the release of Nov EU CPI flash reading which has shown rising again by 0.1% yearly as the same as October while the consensus was referring to increasing by 0.2%.
• It is now obvious to most of the market participant that we are ahead of new coming easing measurements by the ECB to prop up this low inflation rate and also to stimulate the EU economy which has grown in the third quarter by 0.3% undermined by lower than expected growth in Germany and also Italy which has grown quarterly by only 0.2% with no GDP quarterly change in Portugal which is facing currently unstable political situation because of the austerities measurements.
• The ECB president Mario Draghi assured several times on the ECB's readiness to take more stimulus measurements saying that "ECB Will Do What It Must to Spur Price Gains".
• The recent ECB governing council meeting on last Oct. 22 has shown that "there will be reassessment of the QE impact next December" raising the odds of taking new easing decision.
• The ECB's QE started to be enact on last Mar. 9 buying €60b monthly of EU governmental bonds till September 2016 with no buying more than 33.3% of any issuance with no change until now.
• The low inflation pressure in EU has already helped the ECB to prompt its QE plan in the first quarter of this year, before watching later what can be named sluggish inflation rebounding to the positive territory, before turning back below zero last September.
• It should be mentioned here that the energy prices played a key role in directing the inflation in EU too even by a transitory way, despite the common currency slide which could not prop up the inflation rate in EU yet.
• Now, EURUSD which could find support at 1.0550 yesterday can face in its way down further another supporting level at 1.0520 which could prop the pair up on last Apr. 13 to form higher low above 1.0462 which capped the pair falling on last Mar. 13.
• While the way up is in need now for getting over intermediate resistance at 1.0638, before 1.0707 which stopped its rebound previously from 1.0663, before facing last week high at 1.0763 which can be followed by facing higher resistance at 1.0829 which capped its bouncing up from 1.0674.
• EURUSD is now in its day number 31 of continued being below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today 1.0637.
• After finding support at 1.0550 yesterday the daily chart is showing now that the pair is having its daily RSI-14 in the neutral area but close to the oversold area below 30 reading now 34.862.
• While EURUSD Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having also its main line now in the neutral region reading 59.090 and also its signal line which is reading 42.887.

Have a good day

Kind Regards
FX Market Strategist
Walid Salah El Din
Mob: +20 12 2465 9143
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

03-12-2015, 08:20 AM	#1
walid متداول نشيط تاريخ التسجيل: May 2004 المشاركات: 848	3-12-2015 - The eyes are on the ECB next easing step, After paving for it • EURUSD has faced downward pressure yesterday following the release of Nov EU CPI flash reading which has shown rising again by 0.1% yearly as the same as October while the consensus was referring to increasing by 0.2%. • It is now obvious to most of the market participant that we are ahead of new coming easing measurements by the ECB to prop up this low inflation rate and also to stimulate the EU economy which has grown in the third quarter by 0.3% undermined by lower than expected growth in Germany and also Italy which has grown quarterly by only 0.2% with no GDP quarterly change in Portugal which is facing currently unstable political situation because of the austerities measurements. • The ECB president Mario Draghi assured several times on the ECB's readiness to take more stimulus measurements saying that "ECB Will Do What It Must to Spur Price Gains". • The recent ECB governing council meeting on last Oct. 22 has shown that "there will be reassessment of the QE impact next December" raising the odds of taking new easing decision. • The ECB's QE started to be enact on last Mar. 9 buying €60b monthly of EU governmental bonds till September 2016 with no buying more than 33.3% of any issuance with no change until now. • The low inflation pressure in EU has already helped the ECB to prompt its QE plan in the first quarter of this year, before watching later what can be named sluggish inflation rebounding to the positive territory, before turning back below zero last September. • It should be mentioned here that the energy prices played a key role in directing the inflation in EU too even by a transitory way, despite the common currency slide which could not prop up the inflation rate in EU yet. • Now, EURUSD which could find support at 1.0550 yesterday can face in its way down further another supporting level at 1.0520 which could prop the pair up on last Apr. 13 to form higher low above 1.0462 which capped the pair falling on last Mar. 13. • While the way up is in need now for getting over intermediate resistance at 1.0638, before 1.0707 which stopped its rebound previously from 1.0663, before facing last week high at 1.0763 which can be followed by facing higher resistance at 1.0829 which capped its bouncing up from 1.0674. • EURUSD is now in its day number 31 of continued being below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today 1.0637. • After finding support at 1.0550 yesterday the daily chart is showing now that the pair is having its daily RSI-14 in the neutral area but close to the oversold area below 30 reading now 34.862. • While EURUSD Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having also its main line now in the neutral region reading 59.090 and also its signal line which is reading 42.887. Have a good day Kind Regards FX Market Strategist Walid Salah El Din Mob: +20 12 2465 9143 E-Mail: mail@fx-recommends.com http://www.fx-recommends.com