Draghi built the markets up last week and tore them down today. Traders expected a solid plan announcement at the Draghi's press conference following the ECB rate decision Thursday but rather they received another handful of hope. The central them from the press conference was that the ECB may soon undertake market operations on government bond markets and consider other unconventional measures. But still the details are in the works. This lead to a active day for the majors. As most pairs pushed towards resistance zones before crashing lower during Draghi's conference. Trading in Asia and European could be quite Friday as traders sit on the sidelines preparing for NFP in early New York trading Friday. Estimates are for a print of 100,ooo jobs created. If the number exceeds this level the dollar could gain against the majors as QE expectations could disappear in the short-term. If the number disappoints we could see a spike higher in the majors against the dollar once again. As always keep your trades KEANE and play it safe.
EURUSD DRAGHI DISAPPOINTS
Following the 7:45 ET interest rate announcement traders anticipated that Draghi would announce a full-blown bond repurchase program at the 8:30 ET press conference that followed. Rather Draghi used a lot if coulds, shoulds, and mays to describe the ECB’s future actions. Draghi stated that the ECB may soon undertake market operations on government bond markets and consider other unconventional measure. Once again the markets received a handful of words with little to no concrete action.
During Draghi’s press conference the EURUSD moved within a 200 pip range. The pair moved as high as 1.24 before diving lower after market expectations where disappointed. Resistance for the pair is now at 1.2220 and support is at 1.2110. A move down to 1.2110 would place the pair back to the level it was at before last Friday’s short squeeze higher. NFP Friday could also have a strong impact on this pair. A better than expected number could push the cross lower towards the year to date lows at 1.2040 due to diminished expectations for further QE. A week number could send the EURUSD back towards the 1.2330 level. Time can only tell.
Keane Insight: All eyes on NFP. Broader range has Support at 1.2330 and Res at 1.2040
The GBPUSD broke lower today and answered many trader questions regarding a possible head and shoulder formation in the pair. The pair could be on its ways to test monthly lows unless the ECB delivers fireworks Thursday an ignites a risk on rally. Support for the cross begins at the daily low at 1.5525 followed by 1.5460 and 1.54. A break of 1.54 open up the pair for a retest of the yearly lows at 1.5275. Resistance is now at past support at the .382 Fib from the May lows at 1.5660. The BOE rate decision is due in early North American trading. Economist are expecting the rate to remain unchanged.
Keane Insight: Buyers may emerge in Asian trading at support anticipating ECB action.
AUDUSD CIRCLES THE RANGE
The AUDUSD bounced of channel resistance this morning during Draghi’s press conference and then quickly fell back down to support at 1.0435. In a broader context nothing has changed here. The pair is still in a channel heading higher. A break of 1.0435 could expose the pair for a test lower towards 1.0320. Resistance begins at 1.0550 followed by trend line support at 1.0570.
Keane Insight: Still in channel. Consolidation ahead of NFP
NZDUSD STAYS ABOVE SUPPORT
The NZDUSD remained once again above support at .8060. As long as the pair remains above this level the most likely move is a push higher towards .8235. If the .8060 support level breaks the next level to watch is .80. A move below that level opens up a move down towards .7860. Keep these levels in mind if volatility picks up once again following NFP.
Keane Insight; Above .8060 attracts range top at .8235.
USDCAD PARTY AT PARITY IS OVER
The USDCAD attempted one last push towards parity on Thursday before breaking higher after Draghi’s disappointing comments. Resistance can now be found at 1.01 and support is at past resistance at 1.0050. NFP Friday could once again spark volatility in this pair. Large term resistance is at 1.0150 and resistance is at the channel support at .9980.
Keane Insight: Expecting consolidation ahead of NFP
USDJPY CALLS THE RANGE HOME
The USDJPY managed to steer clear of the fireworks today and remain squarely in its current range. The cross has drifted sideways for over two weeks. At least the pair is no longer moving lower. Resistance is firmly at 78.60 and support is at 78.
Keane Insight: Play the Range until it breaks
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