20 Jan 2015
EUR/USD deflates to lows around 1.1560
FXStreet (Edinburgh) - The common currency remains unable to stage any sustainable rebound on Tuesday, sending EUR/USD to test intraday lows around 1.1560.
EUR/USD weaker ahead of ECB
The ZEW Survey in Germany and the EMU surprised investors to the upside for the month of January, however its effects proved to be short-lived as the subsequent correction higher stalled around 1.1610/15. Without releases in Euroland tomorrow, all the attention turns to Thursday, when the ECB could announce further monetary easing under a QE programme, which could involve sovereign bond purchases for at least €500 billion during two years.
Regarding the potential QE programme, Chief FX Strategist at TD Securities Shaun Osborne, commented, “An aggressive response (scale, timing) is a strong possibility, we think, and would likely do more immediate harm to the EUR exchange rate than something more in line with the middle of the road estimates”.
EUR/USD levels to watch
As of writing the pair is down 0.35% at 1.1568 and a break below 1.1528 (61.8% of 1.1460-1.1639) would target 1.1460 (11-year low Jan. 16) en route to 1.1445 (low Nov.11 2003) en route to 1.1376 (low Nov.7 2003). On the flip side, the initial hurdle lines up at 1.1649 (high Jan.16) followed by 1.1726 (10-d MA) and finally 1.1792 (high Jan.15).
EUR/USD weaker ahead of ECB
The ZEW Survey in Germany and the EMU surprised investors to the upside for the month of January, however its effects proved to be short-lived as the subsequent correction higher stalled around 1.1610/15. Without releases in Euroland tomorrow, all the attention turns to Thursday, when the ECB could announce further monetary easing under a QE programme, which could involve sovereign bond purchases for at least €500 billion during two years.
Regarding the potential QE programme, Chief FX Strategist at TD Securities Shaun Osborne, commented, “An aggressive response (scale, timing) is a strong possibility, we think, and would likely do more immediate harm to the EUR exchange rate than something more in line with the middle of the road estimates”.
EUR/USD levels to watch
As of writing the pair is down 0.35% at 1.1568 and a break below 1.1528 (61.8% of 1.1460-1.1639) would target 1.1460 (11-year low Jan. 16) en route to 1.1445 (low Nov.11 2003) en route to 1.1376 (low Nov.7 2003). On the flip side, the initial hurdle lines up at 1.1649 (high Jan.16) followed by 1.1726 (10-d MA) and finally 1.1792 (high Jan.15).