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Old 05-09-2014, 15:08
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GDMFX GDMFX is offline
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Default Re: Technical News | GDMFX Brokerage | Daily

FOREX NEWS: ECB SURPRISES THE MARKET WITH ANOTHER RATE CUT. FOCUS SHIFTS ON NON FARM PAYROLLS



EUR/USD
Forex News: The ECB unexpectedly decided to cut the interest rate to 0.05% (previously 0.15%) and Mario Draghi announced that a form of Quantitative Easing will be introduced in order to stimulate the economy. He also mentioned that other measures might be implemented if needed.


Technical Outlook
The surprise offered by the ECB drastically weakened the Euro and the effect was a massive drop of almost 200 pips. The selloff broke 1.3100 and brought the pair into the psychological support at 1.3000, solidifying the control of the bears and renewing the downtrend. Todayís direction will be heavily affected by the US Non Farm Payrolls but strictly from a technical point of view, we expect a small bounce followed by a trend continuation.

Fundamental Outlook
The dayís main event will be the release of the Non Farm Payrolls which is scheduled at 12:30 pm GMT; the expected number is 226K, an increase from last monthís 209K. Higher numbers show that more jobs were created and usually this strengthens the greenback because employment is closely correlated with consumer spending which in turn is a major part of the economy. The NFP release is known to be a huge market mover thus caution is recommended if trading at the time.


GBP/USD
The Bank of England left the rate unchanged and the event didnít have a huge impact on the pairís movement but US Dollar strength generated a clear break of 1.6460 support.


Technical Outlook
The downtrend is resumed and 1.6460 is clearly broken. This level will probably turn into resistance and will reject any bullish moves that may come close to it. The first major support is now located at 1.6250 (visible on a Daily chart) and the Relative Strength Index continues to move in oversold territory, a fact which favors moves to the north in the form of small retracements. The dayís direction will be heavily influenced by the American NFP release which will overshadow the technical side.

Fundamental Outlook
The United Kingdom doesnít release major economic indicators today and all eyes will be turned towards the American employment report.
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