EURUSD plunge post-ECB

  • In their meeting on Thursday the European Central Bank (ECB) slashed GDP and inflation forecasts and shifted to a still more dovish stance, with a new round of monetary stimulus for banks.
  • This unsettled European (and global) equity markets, saw a rush into safe haven Bunds (German Government Bonds) and saw a plunge in the Euro versus most major currencies.
  • Here we focus on a more bearish tone for EURUSD and downside risks for the pan-European equity benchmark, the Euro STOXX 50.

EURUSD intermediate-term bearish shift

We have stressed in a February reports here  that “we see an intermediate-term range theme as 1.1214 to 1.1570, BUT with risks for an intermediate-term bear shift below the lower level” and the post-ECB plunge through 1.1214 has seen an intermediate-term move to a bear trend.

Furthermore, this plunge below 1.1214 alongside prior negative forces from early march through various supports keeps risks lower for Friday.

For Today:

  • We see a downside bias for 1.1175/71; break here aims for 1.1143 and 1.1119.
  • But above 1.1243 opens risk up to 1.1288.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.1119.

  • Lower targets would be 1.1000 and 1.0839
  • What Changes This? Above 1.1420 shifts the outlook back to neutral; above 1.1509 is needed for a bull theme.

4 Hour EUR/USD Chart

EURUSD Chart 2019-03-08

Euro STOXX 50 risk shift to the downside

A selloff through our 3306 support on Thursday to reject recent rebound activity and then break further notable supports at 3298/96, to damage the immediate bull theme and shift risks lower for Friday.

The mid-January surge above 3105 set an intermediate-term bull theme, BUT risk is growing to test 3258 for an intermediate-term shift to neutral.

For Today:

  • We see a downside bias for 3292; break here aims for 3281/80, then maybe key supports at 3265 and 3258.
  • But above 3318/19 opens risk up to 3340.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 3257.

  • Higher targets would be 3306 and 3429.
  • What Changes This? Below 3258 shifts the outlook back to neutral; through 3221 is needed for a bear theme.

4 Hour Chart

EuroStoxx50 Chart 2019-03-08

Latest News

Yen stays strong in risk off scenario

Last Friday’s very weak German Manufacturing Purchasing Managers’ Index data was another blow to the global economic backdrop, with concerns throughout this year of a global slowdown in China, through Asia Pacific and increasingly also in Europe. This has seen riskier asset classes come under negative forces over the past week into latter March, with … Continued

Euro vulnerability

A Euro plunge in the latter part of last week, on Friday driven by very weak German Purchasing Managers’ Index data. Furthermore, the US Dollar has seen broader strength again on Thursday-Friday against many major currencies, after US$ weakness was seen immediately after a far more dovish Federal reserve at their meeting on Wednesday. This … Continued

EURUSD Still stumbles at the 200-day MA

The Euro was the weakest currency on Friday The EURUSD cannot break above to 200-Day Moving Average There may a small bounce on Monday morning As European slides into recession EURUSD will fall to 1.1000 The 200-day moving average (200 DMA) has continued to prove a stubborn barrier to the upward path of EURUSD. This … Continued

Current Market Analysis
Euro breaks down, GBPCAD threatens upside

US Dollar Index holds support and rebounds EURUSD seeds multiple negative signals, downside risks GBPUSD sends buy signal GBPCAD sets up more bullish AUDUSD negative and USDCAD buy signal USDTRY and USDBRL surge

Leave a Reply

Your e-mail address will not be published. Required fields are marked *

Forex Brokers in your location