EUR/USD
The euro plummeted to a new low against the USD at 1.0511. It's a fresh 12-year low. After Draghi's speech during yesterday's session, the pair started a downward journey again. According to Draghi, in January the ECB decided to expand its asset purchase programme to include government bonds after it became clear that there was a need for more monetary stimulus. The EUR/USD pair has lost 30% from the recent peak. Draghi said, inflation is expected to remain very low or negative in the months ahead mainly due to the sharp drop in oil prices. However, despite this fact an inflation rate is likely to move closer the ECB's inflation target over the coming years and reach 1.8 per cent in 2017. The euro fall is accelerated against the US dollar day by day. The pair has broken all major supports.
Upcoming events.
Today, traders eye German Bundesbank President Weidman speech. French and German CPIs are also due. Besides, US core retails, retail sales, and unemployment claims will be published today. We are expecting an uptick on Core retail sales and retails sales from the negative zone.
Technical view.
Ahead of the big data, the euro is trading lower against USD, GBP & AUD. At yesterday's session, we recommended 1.0560 and 1.0530 in the near term. The EUR/USD pair made a low at 1.0511. Eventually, it can go below 1.0000. The prices are closed and trading far below hourly moving averages. Until prices close below 1.0.860, use every rise to sell this week. The weekly resistance is found at 1.0780. Forget buying, until the price closes below 1.0860 on a positional basis. The longer-term target seems at 0.9000 in case prices close below 1.0760 on a monthly basis. The downtrend remains strong. We are recommending lower targets initially at sub 1.1000 and later 0.9000. At yesterday's session, we recommended fresh intraday selling below 1.0680 with targets at 1.0600 and 1.0575. The pair made a low at 1.0511.
Resistance: 1.0740, 1.0780, 1.0825.
Support: 1.0680, 1.0600, 1.0560.
Trade: use a rise to sell. Intraday, selling below 1.0680.
EUR & JPY
The cross broke the previous swing low. At yesterday's session, the cross fell below 200WEma, 200Msma, and 200Mema. These factors represent more noise than voice. The nearest support seems at 126.60, 125.60, and 125.00. At yesterday's session we advised in case, the price closes below 129.00, bears can challenge 128.00 and 125.00 in the near and short term. The cross fell below 127.60. The lowest lows and lower highs have been developing on the h4 chart, suggesting more room for a downside is yet to come. We initially advised selling at 132.35 with a target at 129.00 and again recommended yesterday below 129.00 with targets at 128.00, 125.00, and even 122.50. Besides at yesterday's Asian session, we recommended risky buying with sl 129.00 which was taken off. Intraday resistance seems at 129.00 and 130.15. Support is found at 127.80 and 127.60. The pair held at 138.00% the fib level at yesterday's session on the h4chart. We recommend fresh selling only below 127.60 with targets at 126.10 and 125. Until the price closes below 130.15, the bearish view remains in play.
