EUR downside momentum came back to be in focus

[walid]

• The single currency is still depressed versus its rivals, after Draghi raised the possibility of adding more stimulus measurements during the press conference following the ECB governing council members meeting yesterday.
• Draghi has assured the doubts about taking such measurements for propping up EU CPI which has fallen again below zero in September to -0.1% and also stimulating the economic growth.
• Draghi said that there will be reassessment of the QE impact next December and there were discussions yesterday about lowering the deposit rate. sending Germany 2YR bund yield to all times low at -0.322%.
• While the EU major equities indexes were cheered by this hint which can be interpreted to step before taking another easing decision by the end of this year.
• The ECB which looked more dovish than widely expected decided yesterday to keep the deposit rate at -0.2%, the marginal lending facility at 0.30% and also the main refinancing interest rate as it has been since last Sep.4, 2014 at 0.05%.
• EURUSD massive falling which started during Draghi's press conference resumed today to lead to breaking of key supporting level at 1.1087 which could hold since last Sep. 3 in a new dovish technical signal.
• EURUSD is now in its second day of being below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today 1.1487.
• After this falling, the pair is still below its hourly 20-SMA, its hourly 50-SMA and its hourly 100-SMA and also its hourly 200-SMA.
• Over the daily chart, the pair is now also below its 20-SMA, its 50-SMA, its 100-SMA and also is below its 200-SMA.
• The pair daily RSI-14 is still in the neutral territory reading now 39.494 but its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having its main line now in the oversold area below 20 reading 10.763 and also its signal line which is reading now 13.315 showing probability for correcting over the short term.
• Technically, EURUSD downside momentum increased again, after short lived existence above the extended trendline resistance from 1.3993 to 1.1714 by reaching 1.1495 on this Oct. 15.
• God willing, EURUSD can meet in the case of falling further below 1.1071 which has been reached today another supporting level at 1.1017, before facing 1.10 psychological level which can be followed by 1.0847 of last Aug. 5 low as a second bottom above 1.0808 which could stave off the pair falling on last Jul. 20.
• The falling below 1.0808 can be faced by supporting level at 1.0658, before 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 rebound from here can be faced by resisting level at 1.1386, before facing 1.15 which could hold previously on Oct. 15 to drag the pair down, after peaking at 1.1495.
• While the rising above 1.15 can open the way for meeting higher resisting level at 1.1567, before 1.1714 which has been the highest reached level since January announcement about the ECB's QE which started to be enact on last Mar. 9 buying €60b monthly of EU governmental bonds till September 2016 with no change until now.
• It should be mentioned here that the energy prices played a key role in directing the inflation in EU even by a transitory way helping the ECB to prompt its QE plan in the beginning of this year, before watching inflation rebounding to the positive territory helped the common currency to get back some of what it lost in the first quarter of this year.


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